User Account

All Pages

Prepare a statement of cash flows using the direct method

Assignment Help Accounting Basics
Reference no: EM131762835

Indigo Inc., a greeting card company, had the following statements prepared as of December 31, 2017.

INDIGO INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17 12/31/16
Cash $5,900 $7,100
Accounts receivable 62,000 51,000
Short-term debt investments (available-for-sale) 35,000 18,100
Inventory 40,400 59,900
Prepaid rent 5,000 4,000
Equipment 153,300 129,100
Accumulated depreciation-equipment (35,000 ) (24,800 )
Copyrights 46,300   50,300  
Total assets $312,900   $294,700  
 
Accounts payable $46,500 $40,200
Income taxes payable 4,100 6,100
Salaries and wages payable 8,100 4,100
Short-term loans payable 8,000 10,100
Long-term loans payable 60,600 69,600
Common stock, $10 par 100,000 100,000
Contributed capital, common stock 30,000 30,000
Retained earnings 55,600   34,600  
Total liabilities & stockholders' equity $312,900   $294,700  

INDIGO INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017
Sales revenue $338,150
Cost of goods sold 175,700
Gross profit 162,450
Operating expenses 119,400
Operating income 43,050
Interest expense $11,300
Gain on sale of equipment 2,000 9,300
Income before tax 33,750
Income tax expense 6,750
Net income $27,000


Additional information:

1. Dividends in the amount of $6,000 were declared and paid during 2017.
2. Depreciation expense and amortization expense are included in operating expenses.
3. No unrealized gains or losses have occurred on the investments during the year.
4. Equipment that had a cost of $19,800 and was 70% depreciated was sold during 2017.

Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Reference no: EM131762835

Questions Cloud

Compute number of people who show up is outside that range : Consider the number of people arriving at the Student Center for coffee between 10 A.m. and 11 A.M. on a given day.
Who is excluded from the decision : Who is excluded from the decision? Are discourse demands met? Is the quality of the discourse changed? Is the quality of the decisions changed?
Should companies receive criticism for outsourcing jobs : Should the government limit a company's ability to outsource computer jobs to other countries? Why or why not?
What makes a shift on a demand curve : What makes a shift on a demand curve? What makes it shift right or left? and what makes the movement on the graph?
Prepare a statement of cash flows using the direct method : Depreciation expense and amortization expense are included in operating expenses
Increase production of beer : Suppose, as manager of Keynesian Brews, you wanted to increase your production of beer. How would you accomplish this in the short run
Determine the price of ice cream at campus : Use your knowledge of the factors that cause shifts in demand, and in a multi-paragraph essay, provide at least three reasons why ice cream sales fluctuate.
Discuss the challenges of multiparty negotiations : Discuss the challenges of multiparty negotiations and strategies for making them as effective as possible?
Explain the difference between profit and rent : Given your answers in (b), in one or two sentences, explain the difference between profit and rent.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd