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Exercise 12-7 Shown below are comparative balance sheets for Indigo Corporation. Indigo Corporation Comparative Balance Sheets December 31 Assets 2017 2016 Cash $ 141,984 $

Exercise 12-7

Shown below are comparative balance sheets for Indigo Corporation.

Indigo Corporation

Comparative Balance Sheets

December 31

Assets

2017

2016

Cash

$ 141,984

$ 45,936

Accounts receivable

183,744

158,688

Inventory

348,696

394,632

Land

167,040

208,800

Equipment

542,880

417,600

Accumulated depreciationequipment

(137,808

)

(66,816

)

Total

$1,246,536

$1,158,840

Liabilities and Stockholders Equity

Accounts payable

$ 81,432

$ 89,784

Bonds payable

313,200

417,600

Common stock ($1 par)

451,008

363,312

Retained earnings

400,896

288,144

Total

$1,246,536

$1,158,840

Additional information:

1.

Net income for 2017 was $194,184.

2.

Depreciation expense was $70,992.

3.

Cash dividends of $81,432 were declared and paid.

4.

Bonds payable amounting to $104,400 were redeemed for cash $104,400.

5.

Common stock was issued for $87,696 cash.

6.

No equipment was sold during 2017.

7.

Land was sold for its book value.

Prepare a statement of cash flows for 2017 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -45,000, or in parenthesis e.g. (45,000)).

Indigo Corporation

Statement of Cash Flows

December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Net Income Payment of Cash Dividends Purchase of Equipment Redemption of Bonds Sale of Land

$

194184

Adjustments to reconcile net income to

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Net Income Payment of Cash Dividends Purchase of Equipment Redemption of Bonds Sale of Land

$

70992

Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Net Income Payment of Cash Dividends Purchase of Equipment Redemption of Bonds Sale of Land

-8352

Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Net Income Payment of Cash Dividends Purchase of Equipment Redemption of Bonds Sale of Land

-25056

Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Net Income Payment of Cash Dividends Purchase of Equipment Redemption of Bonds Sale of Land

45936

83520

Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash

277704

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Net Income Payment of Cash Dividends Purchase of Equipment Redemption of Bonds Sale of Land

137808

Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Net Income Payment of Cash Dividends Purchase of Equipment Redemption of Bonds Sale of Land

125280

Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash

263088

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Net Income Payment of Cash Dividends Purchase of Equipment Redemption of Bonds Sale of Land

-104400

Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Net Income Payment of Cash Dividends Purchase of Equipment Redemption of Bonds Sale of Land

87696

Decrease in Accounts Payable Decrease in Accounts Receivable Decrease in Inventory Depreciation Expense Increase in Accounts Payable Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Net Income Payment of Cash Dividends Purchase of Equipment Redemption of Bonds Sale of Land

81432

Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash

64728

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

605520

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

45936

Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash

$

651456

IE

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