1 The Kebby Group provided its balance sheet and income statement as of December 31 of the current year. (Click the icon to view the balance sheets.) 2(Click the icon to view the income statement.) 3(Click the icon to view additional information.) Requirement Prepare the company's cash flow statement for the current year under the indirect method. Provide all required disclosures. Complete the statement one section at a time, beginning with the cash flows from operating activities. (Use a minus sign or parentheses for any numbers to be subtracted and/or for cash outflows. If a box is not used in the statement, leave the box empty; do not select a label or enter a zero.) The Kebby Group Statement of Cash Flows (Indirect Method) For the Year Ended December 31 Operating Activities: (1) Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) |(12) (13) Changes in Operating Working Capital Accounts (14) (15) |(16) |(17) |(18) Net Cash Provided (Used) by Operating Activities Investing Activities: (19) (20) (21) (22) (23) Net Cash Provided (Used) by Investing Activities Financing Activities: (24) |(25) (26) (27) Net Cash Provided (Used) by Financing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year Provide all required cash flow disclosures. Select the disclosure for the cash equivalent policy O A. For purposes of the statement of cash flows, the company considers all highly liquid debt instruments purchased with maturities of three months or less (including trading investments and accounts receivable) to be cash equivalents. OB. For purposes of the statement of cash flows, the company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents. OC. For purposes of the statement of cash flows, the company considers all highly liquid debt instruments purchased with maturities of six months or less to be cash equivalents. OD. For purposes of the statement of cash flows, the company considers all highly liquid debt instruments purchased with maturities of one month or less to be cash equivalents. Select the disclosure for significant noncash investing and financing activities. O A. The acquisition of $14,500 of intangible assets was purchased on account. OB. The acquisition of $14,500 of intangible assets was financed by long-term debt. OC. Common stock were issued to pay for the purchase of equipment for $432,147 OD. None Cash Paid for Taxes and Interest Cash Paid for Taxes Cash Paid for Interest 1: Balance Sheet The Kebby Group Balance Sheets At December 31 Assets Current Year Prior Year Current Assets Cash $ 42,592 $ 13,000 36,700 31,000 Trading Debt Investments Accounts Receivable, net 67,000 36,000 118.000 Merchandise Inventory 104.000 Total Current Assets $ 250,292 $ 198,000 Noncurrent Assets Investments in Affiliate Companies $ 172,000 $ 108,000 Property, Plant, and Equipment - net 1,571,922 1,159,875 102,250 95,000 Intangible Assets - net Total Noncurrent Assets $ 1,846,172 $ 1,362,875 $ 1,560,875 Total Assets 2,096,464 $ GA 7,100 $ 88,000 13,000 27,000 135,100 $ 5,100 99,000 0 34,000 $ 138,100 $ Liabilities Current Liabilities Current Portion of Long-term Debt Accounts Payable Dividends Payable Income Taxes Payable Total Current Liabilities Noncurrent Liabilities Bonds Payable Less: Discount on Bonds Notes Payable Deferred Tax Liability Net Obligations under Pension Plans Total Noncurrent Liabilities Total Liabilities Shareholders' Equity Common stock, $1 par value Additional Paid-in Capital in Excess of Par- Common Additional Paid-in Capital - Stock Options Retained Earnings Accumulated other Comprehensive Income Total Shareholders' Equity Total Liabilities and Shareholders' Equity 450,000 $ (83,000) 73,000 4,750 48,500 450,000 (100,500) 24,000 1,650 23,100 $ 493,250 $ 398,250 $ 628,350 $ 536,350 80,000 $ 60,000 125,000 0 145,000 2,300 1,160,814 80,000 767,025 72,500 $ 1,468,114 $ 1,024,525 $ 2,096,464 $ 1,560,875 2: Income Statement The Kebby Group Income Statement For the Current Year Ended December 31 Sales 2,213,960 1,322,965 Cost of Goods Sold $ 890,995 $ 49,000 3,900 215,500 1,600 20,100 7,250 Gross Profit Selling, General, and Administrative Expenses Unrealized Losses on Trading Portfolio Pension Expense Bad Debt Expense Depreciation Expense Amortization Expense Total Operating Expenses Operating Income Interest Expense Investment Income (includes gain on sale) Equity Earnings from Affiliate Companies Income Before Tax $ 297,350 $ 593,645 $ (50,300) 51,400 123,000 $ 717,745 (285,456) Income Tax Expense $ 432,289 Net Income