Presented below is the 2018 income statement and comparative balance sheet infor

Question

Presented below is the 2018 income statement and comparative balance sheet information for Tiger Enterprises.

Required:
Prepare Tiger’s statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments). (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)
  

TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2018 ($ in thousands) Sales revenue $ 9,000 Operating expenses: Cost of goods sold $ 3,800 Depreciation 280 Insurance 300 Administrative and other 2,200 Total operating expenses 6,580 Income before income taxes 2,420 Income tax expense 968 Net income $ 1,452 Balance Sheet Information ($ in thousands) Dec. 31,2018 Dec. 31, 2017 Assets: Cash $ 380 $ 240 Accounts receivable 770 870 Inventory 700 640 Prepaid insurance 90 40 Plant and equipment 2,500 2,000 Less: Accumulated depreciation (920 ) (640 ) Total assets $ 3,520 $ 3,150 Liabilities and Shareholders' Equity: Accounts payable $ 320 $ 400 Payables for administrative and other expenses 320 440 Income taxes payable 220 190 Note payable (due 12/31/2019) 1,040 800 Common stock 980 840 Retained earnings 640 480 Total liabilities and shareholders' equity $ 3,520 $ 3,150

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Income                 1,452.00 Add Income Tax expense                     968.00 Depreciation                     280.00 Amortisation of intangible Decrease in AR                     100.00 Increase in inventory                     (60.00) Increase in prepaid insurance                     (50.00) Decrease in AP                     (80.00) Decrease in Payables for administrative and other expenses                  (120.00) Income Taxes paid = 190 + 968 - 220                  (938.00) Cash flow from operating activities                 1,552.00 Cash flow from Investing activities Purchase of PPE                  (500.00) Cash flow from Investing activities                  (500.00) Cash flow from Financing activities Issue of Stock                     140.00 Issue of Notes payable                     240.00 Dividends Paid = 1452 - (640 -480)               (1,292.00) Cash flow from Financing activities                  (912.00) net change in cash and cash equivalents                     140.00 Opening cash and cash equivalents                     240.00 Closing cash and cash equivalents                     380.00

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