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Prepare ND Inc's 2020 statement of cash flows, using the indirect method to present cash flows from operating activities. 2. Statement of Cash Flows -
Prepare ND Inc's 2020 statement of cash flows, using the indirect method to present cash flows from operating activities.
2. Statement of Cash Flows - Indirect Method (15 points) Presented below are the 2020 income statement and comparative balance sheets for ND Inc. ND Inc. Income Statement For the Year Ended December 31, 2020 (S in thousands) Sales revenue $ 14.250 Service revenue 3.400 Total Revenue $ 17,650 Cost of goods sold 7,200 Operating expenses 3.900 Total operating expenses 11.100 Operating Income 6,550 Interest Expense 200 Income before income taxes 6,350 Income tax expense 2.500 Net income 3.850 Balance Sheet Information (S in thousands) 12/31/2020 12/31/2019 Assets: Cash $ 7,350 $ 2.200 Accounts receivable 2,500 2.200 Inventory 4,000 3,000 Prepaid rent 150 300 Plant and equipment 14,500 12.000 Less: Accumulated depreciation (5.100) (4,500) Total assets $ 23,400 $ 15,200 Liabilities and Shareholder's Equity: Accounts payable S1,400 S1,100 Interest payable 100 Deferred service revenue 800 600 Income taxes payable 550 800 Loan payable 5,000 Common stock 10,000 10,000 Retained earnings 5.550 2.700 Total liabilities and shareholders' equity S 23.400 S 15,200 0 0 Additional information for the 2020 fiscal year (S in thousands): 1. Cash dividends of $1,000 were declared and paid. 2. Equipment costing $4,000 was purchased with cash. 3. Equipment with a book value of $500 (cost of $1,500 less accumulated depreciation of $1,000) was sold for $500. 4. Depreciation of $1,600 is included in operating expenses. Instructions: Prepare ND Inc.'s 2020 statement of cash flows, using the indirect method to present cash flows from operating activities. You may use the template on the next page as a reference to organize your solution. However, do not read into the number of lines in each section - you may need more or fewer lines to complete each section. Adapt as necessary if you use Word or Excel for your solution Step by Step Solution
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