Cash Flows Horiz Analysis Horiz Analysis Vertic Analysis Vertic Analysis from Oper Inc St Bal St Inc St Bal Sheet Ratios Requirement Prepare the cash flows from operations section of R. Ashburn Inc.'s 2018 statement of cash flows using the indirect method. Enter items to be subtracted as negative values. R. Ashburn Inc. Cash Flows from Operating Activities-Indirect Method For Year Ended December 31, 2018 Cash flows from operating activities: Net income S 23,600x Adjustments to reconcile net income to net cash provided by operations: Add: Depreciation expense S 37,000 Add: Accounts receivable decrease (6,000) Add: Inventory decrease (2.000) Add: Prepaid expenses increase 1,300 Add: Other current assets increase 760 Add: Accrued liabilities decrease Add: Accounts payable decrease (600) Add: Accrued liabilities increase 800 Less: Income taxes payable decrease (2.200) Net cash provided by operating activities 29,060 S 52,660 Cash Flows from Oper Horiz Analysis Inc St > *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. R. Ashburn Inc. Income Statement For years ended December 31, 2017 and 2018 R. Ashburn Inc. Comparative Balance Sheets December 31, 2018 and 2017 2017 2018 Change 2018 Sales (all on credit) Cost of goods sold Gross margin Depreciation expense Other operating expenses Total operating expenses Operating income Other income (expenses) Interest expense 2017 $488,000 $439,000 (309,000) (253,000) 179,000 186,000 Current assets: Cash $49,020 $31,500 $17,520 Accounts receivable (net) 38,000 32,000 6,000 Inventory 48,000 46,000 2,000 Prepaid expenses 1,000 2,300 -1,300 37,000 51,000 106,000 88,000 Other current assets 1,440 2,200 -760 Total current assets 137,460 114,000 23,460 143,000 139,000 36,000 47,000 Long-term Investments 81,000 56,000 25,000 Plant assets 307,000 257,000 50,000 Less: accumulated (5,000) (3.700) (77,800) (51,000) 26,800 depreciation Gain on sale of 5,100 3,600 Total plant assets 229,200 206,000 23,200 investments Loss on sale of plant (2,300) (2,800) Total assets 447,660 376,000 71,660 assets Total other income (12.400) (2,900) (expenses) Current liabilities: Income before income 33,800 taxes Income taxes expense Net income (10,140) $23.660 $30,870 44.100 (13.230) Accounts payable $29,400 $30,000 $-600 Accrued liabilities Income taxes payable Total current liabilities 4,800 800 35,000 4,000 800 3,000 -2,200 37,000 -2,000 R. Ashburn Inc. Statement of Retained Earnings For the year ended December 31, 2018 Long term liabilities: Notes Payable 249,000 Total liabilities 284,000 185,000 64,000 222,000 62,000 2018 2017 Ret. earnings, Jan. 1 Add: net income Deduct: Dividends Increase in retained $29,000 23,660 30,870 (14,000) (1,870) 9.660 29,000 $0 Stockholders' equity Common stock, $5 par 100,000 100,000 value Additional paid-in capital 25,000 25,000 0 Retained earnings 38,660 29,000 9.660 earnings Ret. earnings, Dec. 31 $38,660 $29,000 Total stockholders' equity 163,660 154,000 9,660 Total liabilities and $447,660 $376,000 $71,660 stockholders' equity Other information: Shares of common stock outstanding 20,000 20,000 Earnings per share $1.18 $1.54 Dividends per share $0.7 $0.09 Market price per share, $14 $12 common stock