Problem 12-9A Condensed financial data of Cheng Inc. follow. Cheng Inc. Comparat
ID: 2392503 • Letter: P
Question
Problem 12-9A
Condensed financial data of Cheng Inc. follow.
Cheng Inc.
Comparative Balance Sheets
December 31
Assets
2019
2018
$80,800
$48,400
92,800
33,000
117,500
102,850
28,400
26,000
143,000
114,000
270,000
242,500
(50,000
)
(52,000
)
$682,500
$514,750
Liabilities and Stockholders’ Equity
$112,000
$67,300
16,500
17,000
110,000
150,000
220,000
175,000
224,000
105,450
$682,500
$514,750
Cheng Inc.
Income Statement
For the Year Ended December 31, 2019
$135,460
12,410
46,500
27,280
4,730
7,500
$158,900
Additional information:
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).)
Explanation / Answer
Cash flow Statement: Net income for the period 158,900 Adjustment required for reconciliation Depreciation 46,500 Loss on sale of pant 7500 Increase in Accounts receivable -59800 Increase in Inventory -14650 Increase in prepaid expensne -2,400 Increase in accounts payable 44,700 Decrease in accrued expense -500 Net cash provided from operating activities 180250 Cash flows from Investing activities: Purchase of equipment -85000 Sale of equipment 1,500 Purchase of investment -29,000 Net cash used in investing activities -112,500 Cash flows from Financing activities: Repayment of bonds -40000 Issue of common stock 45000 Dividend paid -40350 Net cash used in financing activities -35350 Net increase in cash 32,400 Beginning balance in cash 48,400 Ending balance in cash 80800