A29: Statement of Cash Flows

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Statement of Cash Flows Instructions Labels and Amount Descriptions Statement of Cash Flows Instructions The comparative balance sheet of Orange Angel Enterprises Inc at December 31, 2048 and 2017, is as follows: 1 Dec 31, 20Y8 Dec. 31, 2017 2 Assets 3 Cash $151,000.00 $190,000.00 Accounts receivable (net) 522,000.00 569,000.00 5 Merchandise inventory 968,000.00 759,000.00 28,000.00 19.000.00 6 Prepaid expenses 7 Equipment Accumulated depreciation-equipment 2.032.000.00 1.424,000.00 8 (304,000.00) (380,000.00) $3,321,000.00 9 Total assets $2,657,000.00 10 Liabilities and Stockholders' Equity 11 Accounts payable (merchandise creditors) $190,000.00 $171,000.00 0.00 759,000.00 12 Mortgage note payable 13 Common stock, $10 par 1,140,000.00 380,000.00 14 Excess of paid-in capital over par 570,000.00 190,000.00 15 Retained earnings 1,421,000.00 1,157,000.00 16 Total liabilities and stockholders' equity $3,321,000.00 $2,657,000.00 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows: a. Net income, $359,000. b. Depreciation reported on the income statement, $218,000. c. Equipment was purchased at a cost of $750,000, and fully depreciated equipment costing $142,000 was discarded, with no salvage realized d. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty e. 76,000 shares of common stock were issued at $15 for cash f Cash dividends declared and paid $95,000 Required: Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for operating activities Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required Labels December 31, 20Y8 For the Year Ended December 31, 20Y8 Amount Descriptions Cash paid for equipment Cash received from issuing common stock Cash dividends Cash paid to retire mortgage note payable Decrease in merchandise inventory Decrease in accounts payable Decrease in accounts receivable Decrease in prepaid expenses Depreciation Increase in accounts payable Increase in accounts receivable Increase in merchandise inventory Increase in prepaid expenses Net increase in cash Net decrease in cash Net cash flows from financing activities Net cash flows from investing activities Net cash flows from operating activities Net cash flows used for financing activities Net cash flows used for investing activities Net cash flows used for operating activities Net income Net loss Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required. Orange Angel Enterprises Inc. Score: 132/149 Statement of Cash Flows (Label) 1 Cash flows from (used for) operating activities: 2 Net income $359,000.00 3 3 Adjustments to reconcile net income to net cash flows from (used for) operating activities: 4 218,000.00 Depreciation Changes in current operating assets and liabilities: 5 6 Decrease in accounts receivable 47,000.00 7 Increase in merchandise inventory (209.000.00) 8 Increase in prepaid expenses (9.000.00) 19,000.00 9 Increase in accounts payable $425,000.00 $(750,000.00) 10 Net cash flows from operating activities 11 Cash flows from (used for) investing activities: 12 Cash paid for equipment Net cash flows used for investing activities 14 Cash flows from (used for) financing activities: 15 Cash received from issuing common stock 13 (750,000.00) $1.140,000.00 16 Cash paid to retire mortgage note payable (759,000.00) 17 Cash dividends (950,000.00) 18 Net cash flows from financing activities 569,000.00 19 Net decrease in cash $244,000.00 20 Cash balance, January 1, 2048 190,000.00 21 Cash balance, December 31, 20Y8 $434,000.00