Question
Problem 4-11 from intermediate accounting 9e, by spiceland Presented below are the 2018 income statement and comparative balance sheets for Santana Industries. SANTANA INDUSTRIES Income
Problem 4-11 from intermediate accounting 9e, by spiceland
Presented below are the 2018 income statement and comparative balance sheets for Santana Industries.
SANTANA INDUSTRIES Income Statement For the Year Ended December 31, 2018 ($ in thousands)
Sales revenue $ 14,250 Service revenue 3,400 Total revenue $ 17,650 Operating expenses: Cost of goods sold 7,200 Selling 2,400 General and administrative 1,500 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 ($ in thousands) Dec. 31, 2018 Dec. 31, 2017 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 shareholders equity: Accounts payable $ 1,400 $ 1,100 Interest payable 100 0 Deferred service revenue 800 600 Income taxes payable 550 800 Loan payable (due 12/31/2020) 5,000 0 Common stock 10,000 10,000 Retained earnings 5,550 2,700 Total liabilities and shareholders equity $23,400 $ 15,200
Page 220 Additional information for the 2018 fiscal year ($ in thousands): Cash dividends of $1,000 were declared and paid. Equipment costing $4,000 was purchased with cash. Equipment with a book value of $500 (cost of $1,500 less accumulated depreciation of $1,000) was sold for $500. Depreciation of $1,600 is included in operating expenses.
Required: Prepare Santana Industries 2018 statement of cash flows, using the indirect method to present cash flows from operating activities.
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