Question
Below are the condensed balance sheet and income statement for the Beltway Company, Inc. Assuming there were no disposals of fixed assets during the year
Below are the condensed balance sheet and income statement for the Beltway Company, Inc. Assuming there were no disposals of fixed assets during the year 2018, provide a statement of cash flows using the indirect method for the year ended December 31, 2018. (25%)
Condensed balance sheet December 31, 2018
| 2017 | 2018 |
Assets: |
|
|
Current assets |
|
|
Cash | $8 | $15 |
Accounts receivable | 53 | 58 |
Inventory | 52 | 40 |
Prepaid insurance | 5 | 3 |
|
|
|
Property plant and equipment | $140 | $150 |
Accumulated depreciation | (45) | (55) |
Net PP&E | 95 | 95 |
Total assets | $213 | $211 |
Liabilities: |
|
|
Accounts payable | $35 | $21 |
Wages payable | 12 | 16 |
Interest payable | 5 | 2 |
Taxes payable | 3 | 4 |
|
|
|
Long-term debt | 92 | 92 |
Equity: |
|
|
Common stock | 50 | 50 |
Retained earnings | 16 | 26 |
Total liabilities and equity | $213 | $211 |
Condensed income statement for year ended December 31, 2018
Sales | $480 |
COGS | 328 |
Operating expenses: |
|
Wages | 103 |
Utilities | 11 |
Insurance | 3 |
Depreciation | 10 |
Operating income | 25 |
Interest | 12 |
Income before tax | 13 |
Tax | 3 |
Net income | $10 |
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