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Prepare a statement of cash flows for Howard Industries, Inc., for the year ended December 31,2017, using the indirect method. For the Year Ended December
Prepare a statement of cash flows for Howard Industries, Inc., for the year ended December 31,2017, using the indirect method.
For the Year Ended December 31, 2017 Sales revenues $ 951,000 383,000 $ 568,000 Less: Cost of goods sold Gross profit Less operating expenses: Salaries and wages expense 193,000 Insurance expense 10,500 Depreciation expense 42,700 81,000 Other operating expenses 327,200 Total operating expenses Operating income Plus other income and less other expenses: $ 240,800 Interest expense 5,300 3,500 Gain on sale of PP&E Total other income and expenses 1,800 Income before income taxes $ 239,000 71,700 Less: Income tax expense $ 167,300 Net income December 31, 2017 and 2016 Assets 2017 2016 Current assets: : Cash $ 287,000 Accounts receivable 126,000 475,000 $ 78,000 326,000 10,000 Inventory 219,000 5,000 Prepaid insurance Total current assets $ 889,000 $ 637,000 $ 590,000 $ 575,000 Property, plant, and equipment Less: Accumulated depreciation (149,000) 90,000 (116,000) 76,000 Investments $ 1,420,000 $ 1,172,000 Total assets Liabilities Current liabilities: Accounts payable (inventory purchases) $ 53,000 $ 34,000 Wages payable 16,400 17,700 16,400 17,700 Wages payable Interest payable Income taxes payable 1,700 300 62,700 12,500 3,500 Other accrued expenses payable 6,000 Total current liablities $ 139,800 $ 68,000 Long-term liabilities 60,000 27,000 Total liabilities $ 199,800 $ 95,000 Stockholders' equity Common stock $ 607,000 $ 613,200 607,000 470,000 Retained earnings Total stockholders' equity $ 1,220,200 $ 1,077,000 Total liabilities and equity $ 1,420,000 $ 1,172,000 Additional information follows: a. Sold plant asset for $4,400. The original cost of this plant asset was $10,600 and it had $9,700 of accumulated depreciation associated with it. b. Paid $8,000 on the bonds payable; issued $41,000 of new bonds payable. c. Declared and paid cash dividends of $24,100. d. Purchased new investment for $14,000. Paid cash. e. Purchased new equipment for $25,600. Paid cash. Prepare the statement one section at a time. (Use parentheses or a minus sign for numbers to be subtra Howard Industries, Inc. Statement of Cash Flows (Indirect Method) For the Year Ended December 31, 2017 Operating Activities: Net income Adjustments to reconcile net income to cash basis: Net cash provided by (used for) operating activitiesStep by Step Solution
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