Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Indigo Inc., a greeting card company, had the following statements prepared as of December 31, 2017. INDIGO INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31,
Indigo Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
| INDIGO INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 | ||||
| 12/31/17 | 12/31/16 | |||
| Cash | $5,900 | $7,100 | ||
| Accounts receivable | 62,000 | 51,000 | ||
| Short-term debt investments (available-for-sale) | 35,000 | 18,100 | ||
| Inventory | 40,400 | 59,900 | ||
| Prepaid rent | 5,000 | 4,000 | ||
| Equipment | 153,300 | 129,100 | ||
| Accumulated depreciationequipment | (35,000 | ) | (24,800 | ) |
| Copyrights | 46,300 | 50,300 | ||
| Total assets | $312,900 | $294,700 | ||
| Accounts payable | $46,500 | $40,200 | ||
| Income taxes payable | 4,100 | 6,100 | ||
| Salaries and wages payable | 8,100 | 4,100 | ||
| Short-term loans payable | 8,000 | 10,100 | ||
| Long-term loans payable | 60,600 | 69,600 | ||
| Common stock, $10 par | 100,000 | 100,000 | ||
| Contributed capital, common stock | 30,000 | 30,000 | ||
| Retained earnings | 55,600 | 34,600 | ||
| Total liabilities & stockholders equity | $312,900 | $294,700 |
| INDIGO INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 | ||
| Sales revenue | $338,150 | |
| Cost of goods sold | 175,700 | |
| Gross profit | 162,450 | |
| Operating expenses | 119,400 | |
| Operating income | 43,050 | |
| Interest expense | $11,300 | |
| Gain on sale of equipment | 2,000 | 9,300 |
| Income before tax | 33,750 | |
| Income tax expense | 6,750 | |
| Net income | $27,000 |
| 1. | Dividends in the amount of $6,000were declared and paid during 2017. |
| 2. | Depreciation expense and amortization expense are included in operating expenses. |
| 3. | No unrealized gains or losses have occurred on the investments during the year. |
| 4. | Equipment that had a cost of $19,800and was 70% depreciated was sold during 2017. |
| INDIGOINC. 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 | |
| Dividend PaymentsSale of EquipmentPrincipal Payment on Short-term LoanCash Payments to SuppliersCash Payments for Operating ExpensesPrincipal Payment on Long-term LoanCash Received from CustomersCash Payments for InterestPurchase of EquipmentCash Payments for Income TaxesPurchase of Investments | $ |
| Purchase of EquipmentCash Payments for InterestCash Received from CustomersPrincipal Payment on Long-term LoanCash Payments for Income TaxesDividend PaymentsBorrowing on Short-Term LoanBorrowing on Long-Term LoanSale of Available-for-Sale InvestmentsCash Payments to SuppliersCash Payments for Operating ExpensesSale of EquipmentPurchase of InvestmentsPrincipal Payment on Short-term Loan | $ |
| Purchase of EquipmentPurchase of InvestmentsPrincipal Payment on Short-term LoanSale of EquipmentCash Payments for InterestSale of Available-for-Sale InvestmentsCash Payments to SuppliersCash Payments for Income TaxesBorrowing on Short-Term LoanCash Payments for Operating ExpensesPrincipal Payment on Long-term LoanDividend PaymentsBorrowing on Long-Term LoanCash Received from Customers | |
| Principal Payment on Long-term LoanDividend PaymentsBorrowing on Long-Term LoanSale of Available-for-Sale InvestmentsPurchase of InvestmentsPurchase of EquipmentCash Received from CustomersPrincipal Payment on Short-term LoanCash Payments for Income TaxesCash Payments for InterestSale of EquipmentCash Payments for Operating ExpensesCash Payments to SuppliersBorrowing on Short-Term Loan | |
| Borrowing on Short-Term LoanCash Payments for InterestPurchase of EquipmentPrincipal Payment on Long-term LoanCash Payments for Operating ExpensesPrincipal Payment on Short-term LoanCash Payments to SuppliersBorrowing on Long-Term LoanCash Payments for Income TaxesSale of Available-for-Sale InvestmentsSale of EquipmentDividend PaymentsCash Received from CustomersPurchase of Investments | |
| 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 | |
| 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 | |
| Cash Received from CustomersDividend PaymentsPurchase of InvestmentsPrincipal Payment on Short-term LoanSale of Available-for-Sale InvestmentsPrincipal Payment on Long-term LoanBorrowing on Short-Term LoanCash Payments to SuppliersCash Payments for Operating ExpensesBorrowing on Long-Term LoanCash Payments for InterestCash Payments for Income TaxesSale of EquipmentPurchase of Equipment | |
| Principal Payment on Long-term LoanCash Payments for InterestPrincipal Payment on Short-term LoanBorrowing on Short-Term LoanCash Payments for Operating ExpensesSale of Available-for-Sale InvestmentsDividend PaymentsBorrowing on Long-Term LoanCash Payments for Income TaxesCash Received from CustomersCash Payments to SuppliersSale of EquipmentPurchase of EquipmentPurchase of Investments | |
| Purchase of InvestmentsDividend PaymentsPurchase of EquipmentCash Received from CustomersSale of Available-for-Sale InvestmentsSale of EquipmentCash Payments to SuppliersPrincipal Payment on Long-term LoanBorrowing on Short-Term LoanCash Payments for Operating ExpensesBorrowing on Long-Term LoanCash Payments for Income TaxesPrincipal Payment on Short-term LoanCash Payments for Interest | |
| 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 | |
| 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 | |
| Cash Payments to SuppliersCash Payments for Operating ExpensesCash Received from CustomersCash Payments for InterestCash Payments for Income TaxesSale of EquipmentSale of Available-for-Sale InvestmentsDividend PaymentsPurchase of EquipmentPurchase of InvestmentsBorrowing on Short-Term LoanPrincipal Payment on Short-term LoanPrincipal Payment on Long-term LoanBorrowing on Long-Term Loan | |
| Principal Payment on Short-term LoanCash Payments for Income TaxesCash Received from CustomersPrincipal Payment on Long-term LoanCash Payments for InterestSale of EquipmentDividend PaymentsBorrowing on Short-Term LoanCash Payments to SuppliersCash Payments for Operating ExpensesBorrowing on Long-Term LoanSale of Available-for-Sale InvestmentsPurchase of EquipmentPurchase of Investments | |
| Sale of EquipmentCash Payments for Operating ExpensesPrincipal Payment on Short-term LoanCash Received from CustomersCash Payments for InterestPrincipal Payment on Long-term LoanPurchase of EquipmentBorrowing on Long-Term LoanDividend PaymentsPurchase of InvestmentsSale of Available-for-Sale InvestmentsBorrowing on Short-Term LoanCash Payments for Income TaxesCash Payments to Suppliers | |
| 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 | |
| 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 | |
| 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 | |
| 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 | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cost Management
Authors: Don R Hansen, Maryanne M Mowen, Dan L Heitger
5th Edition
357141091, 978-0357141090
