Need help with this Statement of cash flows, thank you!
Use the following financial statements and additional information to prepare a complete statement of cash flows for the year ended December 31, 2018. The cash provided or used by operating activities should be reported using the indirect method. Wescott Company Balance Sheets At December 31 2018 2017 Assets: Cash Accounts receivable.net Merchandise inventory Prepaid expenses... Equipment..... Accumulated depreciation Equipment... Total assets $ 85,600 72,850 157,750 6,080 280,600 (80.600) $522.280 $ 65,200 56,750 144,850 12,680 245,600 197,600) $427.480 $ 52,850 15,240 59.200 $127,290 $ 45,450 12,240 79.200 $136,890 Liabilities: Accounts payable. Income taxes payable..... Notes payable (long term) ... Total liabilities... Equity: Common stock ($1.00 par). Paid-in capital in excess of par... Retained earnings ---- Total equity- Total liabilities and equity 200,000 53,000 141.990 $394.990 S522,250 150,000 40,000 100.590 $290,590 $427.480 $488,000 Wescott Company Income Statement For Year Ended December 31, 2018 Sales Cost of goods sold... $212,540 Depreciation expense..........- 43,000 Other operating expenses.. 106,260 Interest expense... 6,400 Other gains (losses) Gain on sale of equipment Income before taxes Income taxes expense... Net income (368,200) 4.700 124,500 41.100 S 83.400 Additional Information a. A $20,000 note payable is retired at its carrying value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $120,000 cash. d. Received $29,700 cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700 e. Prepaid expenses relate to Other Expenses on the income statement. f All purchases and sales of merchandise inventory are on credit. Wescott Company Statement of Cash Flows For year ended December 31, 2018 Cash Flows from Operating Activities Net Income Adjustments to reconcile Net Income to Net Cash: Increase in Accounts Receivable Increase in Merchandise Inventory Increase in Accounts Payable Increase in Income Taxes Payable Depreciation Expense Gain on sale of Equipment Decrease in Prepaid Expenses Net Cash provided by Operating Activities Cash Flows from Investing Activities Cash received from sale of plant assets Cash paid for purchase of plant assets Net Cash used in investing activities Cash Flows from Financing Activities Cash received from issuing stock Cash paid for dividends Cash paid to retire Notes Payable Net cash provided by Financing Activities Net increase in cash Cash balance at prior year-end Cash balance at current year-end
