Question
Prepare a Statement of cash flows using the direct method (please show all calculations) 2017 2016 Assets: Cash 200,000 80,000 Accounts receivable, net 87,000 65,000
Prepare a Statement of cash flows using the direct method (please show all calculations)
| 2017 | 2016 | ||
| Assets: | |||
| Cash | 200,000 | 80,000 | |
| Accounts receivable, net | 87,000 | 65,000 | |
| Inventory | 55,000 | 50,000 | |
| Prepaid expenses | 12,000 | 20,000 | |
| Property, plant & equipment | 700,000 | 500,000 | |
| Accumulated depreciation | (100,000) | (60,000) | |
| Total Assets | 954,000 | 655,000 | |
| Liabilities & Equity | |||
| Accounts payable | 37,000 | 25,000 | |
| Accrued liabilities | 26,000 | 20,000 | |
| Taxes payable | 15,000 | 5,000 | |
| Long-term Notes Payable | 110,000 | 50,000 | |
| Common stock | 100,000 | 100,000 | |
| Additional paid in capital | 285,000 | 260,000 | |
| Retained earnings | 381,000 | 195,000 | |
| Total liabilities and equity | 954,000 | 655,000 | |
| Sales | 1,200,000 | ||
| Cost of goods sold | 650,000 | ||
| Gross profit | 550,000 | ||
| Operating expenses | 180,000 | ||
| Pre-tax income | 370,000 | ||
| Income taxes | 74,000 | ||
| Net income | 296,000 |
| a. Stock option expense of $25,000 was recognized in 2017 | |
| b. Equipment of $200,000 was purchased using $60,000 note payable and cash | |
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