exercise 23-6 Comparative balance sheets accounts of Indigo Inc. are presented below
Problem 23-6 Comparative balance sheet accounts of Indigo Inc. are presented below. INDIGO INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,400 $33,900 Accounts Receivable 70,600 60,300 Inventory 30,100 24,100 Equity investments 22,000 38,900 Machinery 30,300 18,700 Buildings 67,900 55,700 Land 7,600 7,600 $270,900 $239,200 Credit Accounts Allowance for Doubtful Accounts Accumulated Depreciation-Machinery Accumulated Depreciation-Buildings Accounts Payable Accrued Payables Long-Term Notes Payable $2,300 5,600 13,500 34,700 3,500 21,000 $1,500 2,200 8,900 24,500 2,600 30,800 CALCULATOR PRINTER VERSION BAC Common Stock, no par Retained Earnings 150,000 40,300 $270,900 125,000 43,700 $239,200 Additional data (ignoring taxes): 1. Net income for the year was $43,000. 2. Cash dividends declared and paid during the year were $21,400. 3. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments (level of ownership is less than 20%) that cost $24,700 were sold during the year for $28,400. No unrealized gains and losses were recorded on these * Investments in 2017 5. Machinery that cost $3,800, on which $750 of depreciation had accumulated, was sold for $2,250 Indigo's 2017 Income statement follows (ignoring taxes). 40,100 Sales revenue $540,400 Less: Cost of goods sold 381,000 Gross margin 159,400 Less: Operating expenses (includes $8,750 depreciation and $5,042 bad debts) 119,300 Income from operations Other: Gain on sale of investments $3.700 (800) 2,900 Loss on sale of machinery $43.000 Net income (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative slon preceding the number ..-45 parentheses e.g. (45).) CALCULATOR PRINTER VERSION BACK Net income (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number ..-45 or parentheses e.o. (45)) Net cash flow from operating activities 44450 (b) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a sign .g. - 15,000 or in parenthesis eg. (15.000 INDIGO INC. Statement of Cash Flows For the Year Ended December 31, 2017 (Indirect Method) Cash Flows from Operating Activities Net Income Adjustments to reconcle net income to Net Cash Provided by Operating Act Gain on Sale of Investments Loss on Sale of Machinery Depreciation Expense Increase in Accounts Receivable (et) Increase in Inventory -6000 Increase in Accounts Payable 10200 Increase in Accrued Payables / 1450 Net Cash Provided by Operating Activities 44450 Cash Flows from Investing Activities Sale of Investments 28400 Sale of Machinery 2250 Purchase of Machinery Purchase of Investments Addition to Buildings Net Cash Used by Investing Activ Cash flows from Binangingitis Net Cash Used by Investing Activities Cash Flows from Financing Activities Reduction in Long-term Note Payable Cash Dividends Paid Net Cash Used by Financing Activities Net Decrease in Cash Cash, January 1, 2017 Cash, December 31, 2017 LINK TO TEXT LINK TO TEXT LINK
