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Statement of Cash Flows-Indirect Method The income statement for Nebula Company for 2017 is as follows: Sales revenue Cost of goods sold Gross profit Operating
Statement of Cash Flows-Indirect Method The income statement for Nebula Company for 2017 is as follows: Sales revenue Cost of goods sold Gross profit Operating expenses For the Year Ended December 31, 2017 Loss before interest and taxes Interest expense Net loss Presented here are comparative balance sheets: $500,000 400,000 $100,000 180,000 $(80,000) 11,000 $(91,000) December 31 2017 2016 Cash Accounts receivable Inventory $95,000 $80,000 50,000 75,000 100,000 150,000 Prepayments 55,000 45,000 Total current assets $300,000 $350,000 Land $475,000 $400,000 Plant and equipment 870,000 800,000 Accumulated depreciation (370,000) (300,000) Total long-term assets $975,000 $900,000 Total assets $1,275,000 $1,250,000 Accounts payable $125,000 $100,000 Other accrued liabilities 35,000 45,000 Interest payable 15,000 10,000 Total current liabilities $175,000 $155,000 Long-term bank loan payable $340,000 $250,000 Common stock $450,000 $400,000 Retained earnings 310,000 445,000 Total stockholders' equity $760,000 $845,000 Total liabilities and stockholders' equity $1,275,000 $1,250,000 Other information is as follows: a. Dividends of $44,000 were declared and paid during the year. b. Operating expenses include $70,000 of depreciation. c. Land and plant and equipment were acquired for cash, and additional stock was issued for cash. Cash also was received from additional bank loans. The president has asked you some questions about the year's results. He is disturbed with the $91,000 net loss for the year. He notes, however, that the cash position at the end of the year is improved. He is confused about what appear to be conflicting signals: "How could we have possibly added to our bank accounts during such a terrible year of operations?" Required: 1. Prepare a statement of cash flows for 2017 using the indirect method in the Operating Activities section. Use the minus sign to indicate net loss, cash payments, cash outflows, or decreases in cash. Nebula Company Statement of Cash Flows For The Year Ended December 31, 2017 Cash Flows from Operating Activities Adjustments to reconcile net income to net cash provided by operating activities: Cash Flows from Investing Activities Cash Flows from Financing Activities JOQ QOQ QO
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