Question

Santa Corporation Income Statement For the Year Ended October 31, 2018 S2,050,000 1439 300 S610,700 535.370 $75,330 Sales Cost of goods sold Gross margin Operating expenses (including depreciation expense of $44,000) Income from operations S12,000 Gain on sale of equipment Interest expense Income before income taxes Income taxes expense Net income 23.200 (11200 S64,130 40.330 $23.800 Santa Corporation Comparative Balance Sheets October 31, 2018 and 2017 2018 2017 Assets: S175,400 $50,000 165,200 200,000 344,000 425,000 Cash Accounts receivable (net) Merchandise inventory Prepaid rent 8,000 148,400 144,000 (39.200 24.000) $801800 $798 000 Equipment Accumulated depreciation, equipment Total assets Liabilities and Stockholders' Equity Accounts payable Income taxes payable Notes payable (long-term) S138,400 $175,400 4,400 20,000 200,000 6,400 50,000 100,000 240,000 181,440 Bonds payable Preferred stock, $10 par value Additional paid-in capital 200,000 Retained earnings Total liabilities and stockholders' equity 121,440 85.56076.760

Answer 1

Statement of Cash Flows - Indirect Method
	Amount in $	Amount in $
Net income		$             23,800
Cash flows from operating activities
Adjustments for:
Depreciation	$             44,000
Gain on sale of Equipment	$            -12,000
Decrease in Account receivables	$             34,800
Decrease inventory	$             81,000
Decrease in Account Payable	$            -37,000
Income tax Payable Increase	$                2,000
Prepaid Expenses Increased	$              -5,000
		$          1,07,800
Net cash from operating activities		$          1,31,600
Cash flows from investing activities
Sale of Equipment	$             18,800
Purchase of Equipment	$            -40,000
Net cash used in investing activities		$            -21,200
Cash flows from Financing activities
Issue of Common Stock
Dividend Paid	$            -15,000
Borrowed new note payable	$             50,000
Paid Notes Payable	$            -20,000
Net cash used in financing activities		$             15,000
Net increase in cash and cash equivalents		$          1,25,400
Add :Cash and cash equivalents at beginning of period		$             50,000
Cash and cash equivalents at end of period		$          1,75,400