Prepare a statement of cash flows Prepare a statement of cash flows using the di
ID: 2541601 • Letter: P
Question
Prepare a statement of cash flows
Prepare a statement of cash flows using the direct or indirect method (your choice) based on the following. Make reasonable assumptions as needed ABC Inc Balance Sheets 12/31/2016 12/31/2017 ABC Inc Income Statement 12 mos endin 12/31/2017 14,236,295 1,400,000 2,500,000 192,000 18,328,295 19,658,695 1,190,000 2,460,000 201,600 23,510,295 Accounts Receivable, net Prepaid expenses Total Current Assets $22,000,000 13,200,000 8,800,000 Sales and Equipment Cost of Sales Machinery and Equipment Computers, Furniture and Fixt 4,400,000 1,000,000 5,400,000 4,505,000 1,300,000 5,805,000 Gross Profit Depreciation 4,055,000 1,750,000 2,900,000 Net Property and 2,500,000 Operating Expense Depreciation Expense 3,300,000 1,155,000 825,000 5,280,000 3,520,000 Tax Expense Total Assets Total Expense Liabilities and Shareholders' Equity Current Liabilities Net Income Other Information Equipment and computers were purchased for cash 100,000 shares of common stock sold for $10 per share Cash dividends of $150,000 were declared Accounts Payabl Accrued liabilities Dividends Payable Income taxes pavable 756,000 1,200,000 120,000 300,000 2,376,000 806,000 1,140,000 132,000 360,000 2,438,000 Total current liabilities Long Term Liabilities 2,756,295 2,756,295 Total Liabilities 5,132,295 5,194,295 a. Compute Earnings per Share b. PE ratio if the stock price is $36 and the outstanding shares are 1,100,000 in 2017 c. Compute the current ratio Ul Capital Stock* Retained Earnin 11,000,000 4,696,000 12,000,000 8,066,000 Total Shareh 15,696,000 20,828,295 1,000,000.00 20,066,000 25,260,295 1,100,000.00 Total Liab & Stckhldrs' Equt Outstanding common sharesExplanation / Answer
Cash dividends paid = Beginning dividends payable + Dividends declared - Ending dividends payable = $120000 + $150000 - $132000 = $138000
ABC INC. Statement of Cash Flows (Indirect Method) For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net income 3520000 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 1155000 Decrease in Accounts Receivable 210000 Decrease in Inventory 40000 Increase in Prepaid expenses -9600 Increase in Accounts payable 50000 Decrease in Accrued liabilities -60000 Increase in Income taxes payable 60000 1445400 Net cash provided by operating activities 4965400 Cash Flows from Investing Activities Purchase of equipment -105000 Purchase of computers -300000 Net cash used by investing activities -405000 Cash Flows from Financing Activities Issuance of Common stock 1000000 Payment of cash dividends -138000 Net cash used by financing activities 862000 Net increase (decrease) in cash 5422400 Cash balance at beginning of year 14236295 Cash balance at end of year 19658695