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34 26 Interest payable 3,400 2,300 27 Income tax payable 30,200 32,500 28 Long-term liabilities: 29 Notes payable 255,000 242,000 30 Stockholders' equity: 31 Common stock 273,000 230,000 32 Retained earnings 307,500 130,000 33 Total liabilities and stockholders' equity $ 895,600 $ 717,800 35 36 Additional Information for 20X2: 37 1. Assume that all increases and decreases in long term assets, long term liabilities, 38 and common stock are a result of cash transactions. 39 2. Land costing $46,500 was sold, resulting in a gain of $6,500. No other 40 long-term assets were sold. 41 3. Additional long-term investments were purchased. 42 4. An additional long-term note payable was signed. No repayments on 43 notes were made. 44 5. Additional common stock was issued. 45 46 47 B D E E 4 5 1 Note: To complete the assignment, go to the worksheet tab labeled Cash Flow 2 and complete the statement of cash flows. 3 Note: Additional information is included at the bottom of the statement. INNOVATION ELECTRONICS, INC. Balance Sheet 6 At December 31 7 20X2 20X1 8 Assets 9 Current assets: 10 Cash $ 184,420 $ 25,740 11 Accounts receivable 68,700 83,000 12 Inventory 134,500 128,000 13 Prepaid insurance 2,980 4,560 14 Long-term assets: 15 Investments 211,000 120,000 16 Land 208,500 255,000 17 Equipment 203,000 203,000 18 Accumulated depreciation (117,500) (101,500) 19 20 Total assets $ 895,600 $ 717,800 21 22 23 Liabilities and Stockholders' Equity 24 Current liabilities: 25 Accounts payable $ 26,500 $ 81,000 4 5 6 1 Note: To complete the assignment, go to the worksheet tab labeled Cash Flow 2 and complete the statement of cash flows. 3 INNOVATION ELECTRONICS, INC. Income Statement For the Year Ended December 31, 20X2 7 Net sales $ 2,430,000 8 Gain on sale of land 6,500 9 10 Total revenues 2,436,500 11 12 Expenses: 13 Cost of goods sold $ 1,565,000 14 Operating expenses 598,000 15 Depreciation expense 16,000 16 Interest expense 17,000 17 Income tax expense 63,000 9 18 2,259,000 19 Total expenses 20 21 Net income $ 177,500 22 Preparing a Statement of Cash Flows using the Indirect Method using Excel's SUM Function and Multi- Tab Cell References Innovation Electronics, Inc. has provided you with the year-end Income Statement and Balance Sheet. The Controller has asked you to prepare the Statement of Cash Flows for the same year ended December 31. Use the information included in the Excel Simulation and the Excel functions described below to complete the task. Multi-Tab Cell Reference: Allows you to refer to data from another cell in a separate tab in the worksheet. When using the multi-tab cell reference, type the equal sign first, then click on the other tab and then click on the cell you want to reference. The syntax of a multi-tab cell reference looks different than a normal cell reference, since it includes the tab name surrounded by apostrophes and also an exclamation point before the cell location. In the Excel Simulation below, if "=Income Statement'!B13" is entered in a blank cell on the Sheet1 tab, the formula outputs the result from cell B13 in the Income Statement tab, which is 16,000 in this example. Basic Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys: + (plus sign to add), - (minus sign to subtract), * (asterisk sign to multiply), and / (forward slash to divide). In the Excel Simulation below, if "=C15+C16 is entered in a blank cell on the Balance Sheet tab, the formula adds the values from those cells and outputs the result, which is 375,000 in this example. If using the other math symbols, the result is an appropriate answer for its function. SUM function: Allows you to refer to multiple cells and adds all the values. You can add individual cell references or ranges to utilize this function. In the Excel Simulation below, if "=SUM(C10, C11,C12)" is entered in a blank cell on the Balance Sheet tab, the formula outputs the result of adding those three separate cells, or 236,740 in this example. Similarly, if "=SUM(C10:C12)" is entered in a blank cell, the formula outputs the same result of adding those cells, except they are expressed as a range in the formula, which outputs 236,740 in this example. 27 Net cash provided by (used in) investing activities 28 29 Cash Flows from Financing Activities: 30 Issue common stock 31 Issue long term note 32 Net cash provided by (used in) financing activities 33 Net increase (decrease) in cash 34 Cash at beginning of the period 35 Cash at end of the period 86 37 A B c D 4 worksheet. Note: Blank cells may be included in calculations. 5 in D00 0 8 6 INNOVATION ELECTRONICS, INC. 7 Statement of Cash Flows For the Year Ended December 31, 20X2 9 Cash Flows from Operating Activities: 10 Net income 11 Adjustments to reconcile net income to net cash 12 provided by operating activities: 13 Depreciation expense 14 Gain (on sale of land) 15 Changes in current assets and current liabilities: 16 Accounts receivable 17 Inventory 18 Prepaid insurance 19 Accounts payable 20 Interest payable 21 Income tax payable 22 Net cash provided by (used in) operating activities 23 24 Cash Flows from Investing Activities: 25 Purchase investments 26 Sale of land