Question #3 (5 points): The following information is available for the A Big Gaz
ID: 2519292 • Letter: Q
Question
Question #3 (5 points): The following information is available for the A Big Gazit Corporation: A Big Gazint Corporation Income Statement For the Year Ended December 31, 2017 Service Revenue Operating Expenses $900,000 700,000 S 200,000 10,000 $ 210,000 25,000 S 185,000 90,000 Operating Income Gain on Investment Sale Net income Before Income Taxes Loss on Sale of Investments Income Tax Expense Net Income The following partial balance sheet information is also available for 2015 and 2014: 2017 2016 S 655,000 435,000 100,000 Cash Accounts Receivable Merchandise Inventory Supplies L.T. Investments Accounts Payable Income Taxes Payable 120,000 40,000 35,000 70,000 10,000 50,000 20,000 80,000 60,000 15,000 In addition, the following transactions took place during 2017: 1. Common stock was issued for $100,000 cash 2. Long-term investments were sold for $55,000. 3. Cash dividends of $80,000 were paid. 4. The operating expenses included depreciation of $30,000. Prepare in good form, a eash flow statement for 2017 using the indireet method for A Big Gazint Corporation. Required:Explanation / Answer
CASHFLOW STATEMENT: Cashflows from operating Activities: Net income during the year 95000 Adjustmemnt to incomee; Depreciation 30000 Gain on sale f Investment -10000 Loss on sale of investment 25000 Increase in Accounts receivable -20000 Decrease in inventory 10000 Decrease in supplies 10000 Increase in Accounts payable 10000 Decease in tax payable -5000 Net cash provided from operating actiites. 145000 Cashflows from Investing activities: Long term investment sold 55000 Net cash provided from Investing activites 55000 Cashflows from Financing activities: Dividend paid -80000 Common stock issues 10000 Net cas provided from financing activites 20000 Net Increase in cash 220,000 Add: Beginning Balance in cash 435,000 Ending balance of cash 655,000