1. eBook

   Statement of Cash FlowsIndirect Method

   The income statement for Quasar Enterprises for 2017 is as follows:

   	For the Year Ended December 31, 2017

   Sales revenue	$500,000
   Cost of goods sold	400,000
   Gross profit	$100,000
   Operating expenses	180,000
   Loss before interest and taxes	$(80,000)
   Interest expense	28,000
   Net loss	$(108,000)

   Presented here are comparative balance sheets:

   	December 31
   	2017		2016
   Cash	$95,000		$80,000
   Accounts receivable	50,000		75,000
   Inventory	100,000		150,000
   Prepayments	55,000		45,000
   Total current assets	$300,000		$350,000
   Land	$475,000		$400,000
   Plant and equipment	870,000		800,000
   Accumulated depreciation	(370,000)		(300,000)
   Total long-term assets	$975,000		$900,000
   Total assets	$1,275,000		$1,250,000
   Accounts payable	$125,000		$100,000
   Other accrued liabilities	35,000		45,000
   Interest payable	15,000		10,000
   Total current liabilities	$175,000		$155,000
   Long-term bank loan payable	$340,000		$250,000
   Common stock	$450,000		$400,000
   Retained earnings	310,000		445,000
   Total stockholders' equity	$760,000		$845,000
   Total liabilities and stockholders' equity	$1,275,000		$1,250,000

   Other information is as follows:

   1. Dividends of $27,000 were declared and paid during the year.
   2. Operating expenses include $70,000 of depreciation.
   3. Land and plant and equipment were acquired for cash, and additional stock was issued for cash. Cash also was received from additional bank loans.

   The president has asked you some questions about the year's results. He is disturbed with the $108,000 net loss for the year. He notes, however, that the cash position at the end of the year is improved. He is confused about what appear to be conflicting signals: "How could we have possibly added to our bank accounts during such a terrible year of operations?"

   Required:

   1. Prepare a statement of cash flows for 2017 using the indirect method in the Operating Activities section. Use the minus sign to indicate net loss, cash payments, cash outflows, or decreases in cash.

   Quasar Enterprises Statement of Cash Flows For The Year Ended December 31, 2017

   Cash Flows from Operating Activities
   Cash collected from customersCash dividends paidIssuance of common stockNet increase in cashNet lossRetained earnings	$- Select -
   Adjustments to reconcile net income to net cash provided by operating activities:
   Acquisition of plant and equipmentAdditional long-term borrowingsAmortization expenseDepreciation expenseIssuance of common stockNet increase in cash	$- Select -
   Acquisition of landAcquisition of plant and equipmentCash dividends paidDecrease in accounts payableDecrease in accounts receivableIncrease in accounts receivable	- Select -
   Acquisition of landAcquisition of plant and equipmentCash dividends paidCost of goods soldDecrease in accounts payableDecrease in inventory	- Select -
   Acquisition of landAcquisition of plant and equipmentCash dividends paidDecrease in prepaymentsIncrease in prepaymentsOperating expenses	- Select -
   Acquisition of landAcquisition of plant and equipmentCash dividends paidIncrease in accounts payableIncrease in accounts receivableIncrease in inventory	- Select -
   Acquisition of landAcquisition of plant and equipmentCash dividends paidDecrease in other accrued liabilitiesGross profitIncrease in other accrued liabilities	- Select -
   Acquisition of landAcquisition of plant and equipmentCash dividends paidDecrease in interest payableIncrease in interest payableInterest expense	- Select -
   Net cash provided by operating activitiesNet cash used by operating activities	$- Select -
   Cash Flows from Investing Activities
   Acquisition of landAdditional long-term borrowingsCash dividends paidDecrease in accounts receivableDepreciation expenseDisposal of assetsIssuance of common stock	$- Select -
   Acquisition of plant and equipmentAdditional long-term borrowingsDecrease in accounts receivableDepreciation expenseDisposal of assetsIssuance of common stock	- Select -
   Net cash provided by investing activitiesNet cash used by investing activities	$- Select -
   Cash Flows from Financing Activities
   Acquisition of landAcquisition of plant and equipmentAdditional long-term borrowingsDecrease in inventoryDepreciation expenseInterest expense	$- Select -
   Acquisition of landDecrease in inventoryDepreciation expenseIssuance of common stockNet lossRetained earnings	- Select -
   Acquisition of landAcquisition of plant and equipmentCash dividends paidDecrease in inventoryDepreciation expenseIncrease in accounts payable	- Select -
   Net cash provided by financing activitiesNet cash used by financing activities	$- Select -
   Net decrease in cashNet increase in cash	$- Select -
   Cash balance, December 31, 2016	fill in the blank 09a759f9c039ffa_35
   Cash balance, December 31, 2017	$fill in the blank 09a759f9c039ffa_36

   2. Despite a net loss for the year, Astro was able to increase its cash at the end of the year

   by buying back its stock.by collecting on last year's sales.by selling its fixed assets.due to payment of dividends.

   Astro can increase its net profits by

   Reduce operating expenses.Increasing its sales collections and reducing depreciation.Cutting its dividends.Investing more in plant and equipment.