Question

Complete the cash flow statement worksheet (using the indirect method) that is attached to the e-mail to which this document is also attached Also compute the amounts for the items listed in cells H6, H7 and H8. Enter the amounts in cells I6, 17 and I8. H7 and H8 are amounts that must be disclosed at the bottom of a formal cash flow statement when using the indirect method. The comparative balance sheet information is found in cells A2-D26. The income statement and retained earnings statement are given in cells K2 to 026. Use cells C4 to C52 to complete the worksheet. Cells Cl and C56 are check cells. If these cells are not zero, there is an error. Cells A28 to D56 would be the information ld appear on the company's 2018 cash flow statement. You do not need to prepare a formal statement. I have entered the net income information to help get you started. Cell F3 shows the change in cash for the year Put your name in cell Al, print the document (The print area has been set) and bring it to class on the day of the final exam Other information: 1) The total depreciation expense consists of S13,000 on buildings and $20,000 on equipment. 2) Equipment that had a cost of S57,000 and a book value of S29,000 was sold for $21,000. 3) Included in the other operating expenses is Patent amortization expense of S6.000. ) All changes in long-term notes payable, mortgage payable, common stock and treasury stock are the result of cash transactions. 5) Any equipment that was purchased was purchased with cash. 12/31/2018 Endin 1/1/2018 Beginning 2018 Income Statement 105,000 125,000 281,000 Cash Accounts Receivable (net) 5 Inventory 6 Prepaid Rent Net Sales 1,113,000 Operating Expenses 472,000 9,000 205,000 450,000 39,000 374,000 Cost of Goods Sold 98,000 5,000 72,000 58,000 33,000 Cash paid for rent Cash paid for taxes Cash pald for Interest 5000 Rent Expense 12000Wages Expense 7,000 182,000 450,000 26,000) 307,000 8 Bulldings 9 Accumulated Depreciation 10 Equipment Other Operating Expenses Depreciation Expense Total Operating Expenses Operating Income Nonoperating ltems 966,000 147,000 12 Accumulated Depreciation (100,000) (108,000) Interest Expense Loss on Sale of Equipment 12,000 8,000 14 Patents 15 Accounts Payable 16 Wages Payable 17 Taxes Payable 18 Notes Payable-Long-Term 19 Mortgage Payable 20 Deferred Taxes 21 Common Stock 22 Retained Earnings 10,000 (480,000) (24,000 (40,000) 167,000) 170,000 41,000 (690,000 (206,000 16,000 477,000) (32,000) (28,000) 123,000) (194,000) (30,000) (660,000) (190,000) 20,000 Total Nonoperating Items Income before Income Taxes 127,000 40,000 11,000 Provision for Inocme Taxes 51,000 76,000 190,000 60,000 206,000 Net Income Retained Earnings 1/1/2018 Cash Dividends Retained Earnings 12/31/2018 24 Treasury Stock (at cost) 32,000 10,000 28 Cash from Operating Activities 29 Net income 30 34 38 40 41 Cash from Investing Activities Cash from Investing Activities 0 Cash from Financing Activities 0 Net Change in Cash for the Year 0 0

Answer 1

Cash Flow Statement
Indirect Method
Cash Flow from Operating Activities
Net Income		$      76,000.00
Adjustments
Deferred Tax	$   11,000.00
Loss on sale of equipment	$      8,000.00
Patent Amortization expenses	$      6,000.00
Depreciation	$   33,000.00
Changes in Current Assets/ Current Liabilities
Increase in Accounts Receivable	$ (14,000.00)
Decrease in Inventory	$      8,000.00
Increase in Prepaid Rent	$   (2,000.00)
Increase in Accounts Payable	$      3,000.00
Decrease in Wages Payable	$   (8,000.00)
Increase in Taxes Payable	$   12,000.00
Total Adjustments		$      57,000.00
Cash from Operating Activities			$    133,000.00
Cash flow from Investing Activities
Purchase of Land		$    (23,000.00)
Sale of Equipment		$      21,000.00
Purchase of Equipment		$ (124,000.00)
Net cash used In investing activities			$ (126,000.00)
Cash flow from Financing Activities
Notes Payable long term		$      44,000.00
Repayment of Mortagage		$    (24,000.00)
Increase in Treasury Stock		$    (22,000.00)
Issue of Common stock		$      30,000.00
Dividend Paid		$    (60,000.00)
Net cash used in financing activities			$    (32,000.00)
Increase in Cash			$    (25,000.00)
Opening Balance of Cash			$    105,000.00
Closing Balance of Cash			$      80,000.00