Question
Spiceland Intermediate Accounting, Presented below are the 2018 income statement and comparative balance sheets for Santana Industries. SANTANA INDUSTRIES Income Statement For the Year Ended
Spiceland Intermediate Accounting,
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 $ 18,050
Service revenue 7,200
Total revenue $ 25,250
Operating expenses:
Cost of goods sold 9,100
Selling 4,300
General and administrative 3,400
Total operating expenses 16,800
Operating income 8,450
Interest expense 390
Income before income taxes 8,060
Income tax expense 4,400
Net income $ 3,660
Balance Sheet Information ($ in thousands) Dec. 31, 2018
Dec. 31, 2017 Assets:
Cash $ 9,250 $ 3,910
Accounts receivable 6,300 4,100
Inventory 7,800 4,900
Prepaid rent 340 680
Plant and equipment 18,300 15,800
Less: Accumulated depreciation (7,000 ) (6,400 )
Total assets $ 34,990 $ 22,990
Liabilities and Shareholders Equity:
Accounts payable $ 5,200 $ 3,000
Interest payable 290 0
Deferred service revenue 1,180 790
Income taxes payable 740 1,180
Loan payable (due 12/31/2020) 8,800 0
Common stock 11,900 11,900
Retained earnings 6,880 6,120
Total liabilities and shareholders' equity $ 34,990 $ 22,990
Additional information for the 2018 fiscal year ($ in thousands):
1. Cash dividends of $2,900 were declared and paid.
2. Equipment costing $7,800 was purchased with cash.
3. Equipment with a book value of $2,400 (cost of $5,300 less accumulated depreciation of $2,900) was sold for $2,400.
4. Depreciation of $3,500 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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