Question

Presented below is the 2021 income statement and comparative balance sheet information for Tiger Enterprises. $10,000 7,100 2,900 (1,160) $ 1,740 Dec. 31, 2020 TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2021 ($ in thousands) Sales revenue Operating expenses: Cost of goods sold $4,000 Depreciation expense 300 Insurance expense 400 General and administrative expense 2,400 Total operating expenses Income before income taxes Income tax expense Net income Balance Sheet Information ($ in thousands) Dec. 31, 2021 Assets: Cash $ 420 Accounts receivable 780 Inventory 730 Prepaid insurance 110 Equipment 2,700 Less: Accumulated depreciation (960) Total assets $3,780 Liabilities and Shareholders' Equity: Accounts payable $ 330 Accrued liabilities (for general & administrative expense) 330 Income taxes payable 230 Notes payable (due 12/31/2022) 1,160 Common stock 1,020 Retained earnings 710 Total liabilities and shareholders' equity $3,780 $ 260 890 660 50 2,100 (660) $ 3,300 $ 420 460 210 900 860 450 $ 3,300 $ 3,300

Answer 1

Answer

    Tiger Enterprises

   Statement of cash flow

   For the Year Ended 31st December, 2021

Particulars	$	$
Cash flow from operating activities
Net income	1,740
Add depreciation	300
Add decrease in account receivables	110
Less increase in inventory	(70)
Less increase in prepaid insurance	(60)
Less decrease in note payable	(90)
Less decrease in accrued liabilities	(130)
Add increase in income tax payable	20
Cash flow from operating activities		1,820
Cash flow from investing activities
Purchase of equipment	(600)
Cash flow from investing activities		(600)
Cash flow from financing activities
Proceed from issuance of note payable	260
Processed from issuance of common stock	160
Payment of cash dividend	(1,480)
Cash flow from financing activities		(1,060)
Net increase in cash		160
Beginning cash balance		260
Ending cash balance		420

Calculations

Net income is $1,740

Calculation of cash dividend

Particulars	$
Beginning retained earnings	450
Add net income	1,740
	2,190
Less ending retained earnings	(710)
Cash dividend	1,480

Cash dividend is an outflow in financing activities section.

Net increase in cash = cash flow from investing activities + cash flow from operating activities + cash flow from financing activities

Net increase in cash = (600) + 1,820 + (1,060) = $160

The increase in cash is $160.

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