Statement of Cash Flows The comparative balance sheet of Orange Angel Enterprises Inc. at December 31, 2048 and 2017, is as follows: Dec. 31, Dec. 31, 2017 20Y8 Assets Cash $65,220 $79,670 Accounts receivable (net) 100,210 107,400 Merchandise inventory 143, 160 133,120 Prepaid expenses 5,830 4,030 Equipment 291,620 238,510 Accumulated depreciation equipment (75,820) (58,490) Total assets $530,220 $504,240 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $111,350 $105,390 Mortgage note payable 0 151,270 18,000 11,000 Common stock, $1 par Excess of paid-in capital over par Retained earnings 247,000 153,870 142,000 94,580 Total liabilities and stockholders' equity $530,220 $504,240 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows: a. Net income, $151,780. b. Depreciation reported on the income statement, $37,130. C. Equipment was purchased at a cost of $72,910, and fully depreciated equipment costing $19,800 was discarded, with no salvage realized. d. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty. e. 7,000 shares of common stock were issued at $16 for cash. f. Cash dividends declared and paid, $92,490. Required: Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Orange Angel Enterprises Inc. Statement of Cash Flows For the Year Ended December 31, 2018 Cash flows from (used for) operating activities: Net income 151,780 Adjustments to reconcile net income to net cash flows from (used for) operating activities: Depreciation 37,130 Changes in current operating assets and liabilities: Decrease in inventory Increase in accounts receivable Decrease in accounts payable Decrease in prepaid expenses Net cash flows from operating activities Net income 151,780 Adjustments to reconcile net income to net cash flows from (used for) operating activities: Depreciation 37,130 Changes in current operating assets and liabilities: Decrease in inventory Increase in accounts receivable Decrease in accounts payable Decrease in prepaid expenses Net cash flows from operating activities Cash flows from (used for) investing activities: Cash paid for equipment Net cash flows used for investing activities Cash flows from (used for) financing activities: Cash received from issuing common stock Cash dividends Cash paid to retire mortgage note payable Net cash flows from financing activities Cash balance, January 1, 2048 Cash balance, December 31, 2048 $
