The 2017 comparative balance sheet and income statement of Ace Supply Corp. follow. Ace had no non-cash investing and financing transactions during 2017. During the year, there were no sales of land or equipment, no issuance of notes payable, and no repurchase of shares transactions.
Requirements:
1.Prepare the 2017 statement of cash flows, formatting operating activities by using the indirect method.
2.How will what you learned in this problem help you evaluate an investment?
The 2017 comparative balance sheet and income statement of Ace Supply Corp. follow. Ace had no non-cash investing and financing transactions during 2017. During the year, there were no sales of land or equipment, no issuance of notes payable, and no repurchase of shares transactions. (Click the icon to view the comparative balance sheet.) (Click the icon to view the income statement.) Requirements 1. Prepare the 2017 statement of cash flows, formatting operating activities by using the indirect method. . How will what you learned in this problem help you evaluate an investment? Requirement 1. Prepare the 2017 statement of cash flows, formatting operating activities by using the indirect method. Start by completing the cash flows from operating activities. Then, continue with completing the investing and financing activities sections. Finally, determine the net increase in cash. (Use a minus sign or parentheses for subtracting numbers that are typically shown enclosed in parentheses in a statement of cash flows.) Ace Supply Corp. Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Decrease in accounts recievable Decrease in inventories Increase in prepaid expenses Increase in accounts payable Decrease in salary payable Decrease in other accrued liabilities Net cash provided by operating activitiesCash flows from investing activities: Purchase of land Purchase of equipment Net cash used for investing activities Cash flows from financing activities: Payment of dividends Payment of note payable Issuance of common shares Net cash used for financing activities Net increase in cash Cash balance, December 31, 2016 Cash balance, December 31, 2017 Requirement 2. How will what you learned in this problem help you evaluate an investment? A. Learn how operating activities, investing activities, and financing activities generate cash receipts and cash payments O B. Learn how companies prepare the statement of cash flows O C. Both A and B O D. None of the abovei Comparative balance sheet - X 2017 2016 (Decrease) Current assets: Cash and cash. equivalents . . $ 17,300 $ 6,000 $ 11,300 Accounts receivable. 41,700 43,000 (1,300) Inventories. 84, 100 87,400 (3,300) Prepaid. expenses . . . . . . . .. 2,600 1, 100 1,500 Property, plant, and equipment: Land. ..... 89,800 60,000 29,800 Equipment,. net. . 53,000 49,700 3,300 Total assets .... $ 288,500 $ 247,200 $ 41,300 Current liabilities: Accounts payable. . ..... . . . . . . . . . . $ 35,300 $ 34,000 $ 1,300 Salary. payable. . .... .. . . . . . . . . . .. 1,700 6,200 (4,500) Other accrued liabilities . 22,200 24,400 (2,200) Long-term liabilities: Notes payable . . . .. 75,000 102,000 (27,000) Shareholders' equity: Common shares. . . . .... 88,700 64,400 24,300 Retained earnings . . . . ...... 65,600 16,200 49,400 Total liabilities.and shareholders' equity. ... . . . . . . . $ 288,500 $ 247,200 $ 41,300 Print DoneIncome statement X Ace Supply Corp. Income Statement For the Year Ended December 31, 2017 Revenues: Sales revenue . . $ 443,000 Expenses: Cast of goods. sold. . . . .. $ 187,000 Salary. expense . . .... 76,200 Depreciation. expense . . .. . 4,300 Other operating expense . . . 10,700 Interest.expense . . . . ... 25,000 Income. tax. expense . . .. 28,900 Total .expenses. . . ..... 332, 100 Net income. . . . ... $ 110,900 Print Done
