Question

Presented below is the 2018 income statement and comparative balance sheet information for Tiger Enterprises. TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2018 ($ in thousands) Sales revenue $10,500 Operating expenses: Cost of goods sold $4,100 Depreciation 310 Insurance 450 Administrative and other 2,500 Total operating expenses 7, 360 Income before income taxes 3, 140 Income tax expense 1,256 Net income $ 1,884 Balance Sheet Information ($ in thousands) Dec. 31, 2018 Dec. 31, 2017 Assets: Cash $ 440 $ 270 Accounts receivable 785 900 Inventory 745 670 Prepaid insurance 120 55 Plant and equipment 2,800 2,150 Le33: Accumulated depreciation (980) (670) Total assets $3,910 $ 3,375 Liabilities and Shareholders' Equity: Accounts payable $ 335 $ 430 Payables for administrative and other expenses 335 470 Income taxes payable 235 220 Note payable (due 12/31/2019) 1,000 700 Common stock 1,040 870 Retained earnings 965 685 Total liabilities and shareholders' equity $3,910 $ 3,375 Required: Prepare Tiger's statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments). (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)

Answer 1

TIGER ENTERPRISES Statement of cash flows For the Year Ended December 31, 2018 ($ in thousands)
Cash flows from operating activities
Net Income	$ 1,884
Adjustments for Non cash effects :
Depreciation expense	$ 310
Decrease in Accounts receivable ( $ 900 (-) $ 785 ) )	$ 115
Increase in Inventory ( $ 670 (-) $ 745 )	($ 75)
Increase in Prepaid insurance ( $ 55 (-) $ 120 )	($ 65 )
Decrease in Accounts payable ( $ 335 (-) $ 430 )	($ 95)
Decrease in Payables for adm. and other expenses ( $ 335 (-) $ 470 )	($ 135)
Increase in income tax payable ( $ 235 (-) $ 220)	$ 15
Net Cash provided by Operating activities		$ 1,954
Cash Flows from investing activities :
- Purchase of equipment                 ( $ 2,150 (-) 2,800)	($ 650)
Net Cash Used by investing activities		($ 650)
Cash flows from financing activities
- Proceeds from issuance of note            ( $ 1,000 (-) $ 700)	$ 300
- Proceeds from issuance of common stock               ( $ 1,040 (-) $ 870 )	$ 170
- Payment of Dividends             ( $ 685 + $ 1,884 (-) $ 965 )	($ 1,604)
Net Cash used by financing activities		($ 1,134)
Net Increase in cash		$ 170
Cash, January 1 2018		$ 270
Cash, December 31, 2018		$ 440