Tamarisk, Inc. reported the following information for 2017. Tamarisk, Inc. Comparative Balance Sheets December 31 Assets 2017 Change Increase/Decrease 2016 $36,140 Cash $51,880 $15,740 Increase 62,040 21,910 40,130 Increase 43,890 -0- 43,890 Increase Accounts receivable Inventory Prepaid expenses Land Buildings 6,050 3,970 2,080 Increase 54.900 69,610 14,710 Decrease 198,760 198,760 -0- (20,820) (13,880) 6,940 Increase Accumulated depreciation--buildings Equipment Accumulated depreciation-equipment 182,430 68.400 114,030 Increase (10,030) 17,260 Increase (27,290) $551,840 Totals $374,880 $42,610 $39,860 $2,750 Increase Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock ($1 par) 0 10,030 10,030 Decrease 101.880 49,500 Decrease 151,380 60,220 231.570 171,350 Increase Retained earnings 175,780 113,390 62,390 Increase Totals $551.840 $374.880 Tamarisk, Inc. Income Statement For the Year Ended December 31, 2017 Sales revenue $934,100 Cost of goods sold $478,680 Operating expenses 230,070 Interest expense 11.960 Loss on disposal of equipment 1.990 722,700 Income before income taxes 211.400 Income tax expense 64,770 Net income $146,630 1. 2. Additional information: Operating expenses include depreciation expense of $39,990. Land was sold at its book value for cash. 3. Cash dividends of $84,240 were declared and paid in 2017. Equipment with a cost of $165,530 was purchased for cash. Equipment with a cost of $51,500 and a book value of $35,710 was sold for $33,720 cash. 5. Bonds of $49,500 were redeemed at their face value for cash. Common stock ($1 par) of $171,350 was issued for cash. 4. 6. Use this information to prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. - 15,000 or in parenthesis e.g. (15,000).) Tamarisk, Inc. Statement of Cash Flows-Indirect Method For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net Income 146,630 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense 39.990 Increase in Accounts Receivable 40,130 Increase in Inventory 43.890 Increase in Prepaid Expenses 2080 Increase in Accounts Payable 2750 Loss on Disposal of Equipment 1990 Decrease in Accrued Expenses Payable 10030 II Net Cash used by Operating Activities Net Cash Provided by Investing Activities Sale of Land 14710 Purchase of Equipment 165530 Sale of Equipment 33720 Net Cash used by Investing Activities Net Cash Provided by Financing Activities Sale of Common Stock 171.350 Redemption of Bonds Payment of Dividends 84.240 Net Cash used by Financing Activities Net Increase in Cash LIII Cash at Beginning of Period Cash at End of Period
