- Requirements 1. Prepare the 2018 statement of cash flows, formatting operating activities using the indirect method. 2. How will what you learned in this problem help you evaluate an investment in Smithson Pet Supply, Inc.? Comparative balance sheet Smithson Pet Supply, Inc. Comparative Balance Sheet December 31, 2018 and 2017 Increase 2018 2017 (Decrease) $ 6,400 $ 5,800 $ 600 Current Assets: Cash and cash equivalents Accounts receivable Inventory Fixed Assets: 25,500 (1,400) 26,900 89,500 91,600 2,100 Land 89,500 53,400 60,300 49,100 29,200 4,300 Equipment, net Total Assets $ 266,400 $ 231,600 $ 34,800 Current Liabilities: 30.600 $ 35,400 $ (4.800) 2,200 30,400 28,200 Accounts payable Accrued liabilities Long-Term Liabilities: Notes payable 78,000 98,000 (20,000) Comparative balance sheet 2018 2017 (Decrease) Current Assets: Cash and cash equivalents $ 5,800 $ 600 6,400 $ 25,500 Accounts receivable 26,900 (1,400) 2,100 91,600 89,500 Inventory Fixed Assets: Land 89,500 53,400 60,300 49,100 29,200 4,300 Equipment, net Total Assets 266,400 $ 231,600 $ 34,800 Current Liabilities: $ 35,400 $ 30,600 $ 30,400 (4,800) 2,200 28,200 Accounts payable Accrued liabilities Long-Term Liabilities: Notes payable Stockholders' Equity: 78,000 98,000 (20,000) Common stock 88,600 38,800 64,000 6,000 24,600 32,800 Retained earnings Total Liabilities and Stockholders' Equity $ 266,400 $ 231,600 $ 34,800 Income statement ho Smithson Pet Supply, Inc. Income Statement 6A Year Ended December 31, 2018 Revenues: Sales revenue $ 213,000 Interest revenue 8,300 Total revenues $ 221,300 Expenses: Cost of goods sold 70,600 Salaries expense 27,200 Depreciation expense 4,200 Other operating expenses 10,300 Interest expense 11,100 Income tax expense 28,600 Total expenses 152.000 $ Net Income 69,300 $ Requirement 1. Prepare the 2018 statement of cash flows, formatting operating activities using the Indirect method Complete the statement one section at a time, beginning with the cash flows from operating activities. (Use parentheses or a minus sign for numbers to be subtracted Smithson Pet Supply, Inc. Statement of Cash Flows Year Ended December 31, 2018 Cash flows from operating activities: Not income Adjustments to reconcile net income to net cash provided by operating activities Net cash provided by used for) operating activities Cash flows from investing activities: Net cash provided by used for investing activities Net cash provided by (used for) operating activities Cash flows from investing activities: Net cash provided by (used for) investing activities Cash flows from financing activities: Net cash provided by (used for) financing activities Net increase (decrease) in cash: Cash balance, December 31, 2017 Cash balance, December 31, 2018 Requirement 2. How will what you learned in this problem help you evaluate an investment in Smithson Pet Supply, Inc.? O A. Help predict Smithson's ability to pay debt and dividends B. Understand how Smithson's operating activities, investing activities, and financing activities generate cash receipts and cash payments c. Help predict Smithson's future cash flow D. All of the above
