Problem 12-9A Condensed financial data of Indigo Corporation follow Indigo Corpo

Question

Problem 12-9A Condensed financial data of Indigo Corporation follow Indigo Corporation Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Prepaid expenses Long-term investments Plant assets Accumulated depreciation Total Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock Retained earnings Total 2017 2016 $96,800 76,000 205,700 52,000 218,000 485,000 (104,000) $161,600 175,600 225,000 56,800 276,000 570,000 (100,000) $1,365,000 $1,029,500 $204,000 134,600 42,000 292,000 350,000 210,900 $1,365,000 $1,029,500 33,000 220,000 440,000 468,000

Explanation / Answer

Indigo Corporation Cash Flow Statement For the year ended December 31, 2017 Cash flows from operating activities Net Income $   309,160 Adjustment to reconcile net income to: Depreciation expense $      93,000 Loss on disposal of plant assets $      15,000 Increase in accounts receivable $   (99,600) Increase in inventory $   (19,300) Increase in prepaid expenses $      (4,800) Increase in accounts payable $      69,400 Decrease in accrued expenses payable $      (9,000) $      44,700 Net cash provided by operating activities $   353,860 Cash flows from investing activities Proceeds from sale of plant assets $        3,000 Purchase of long term investments $   (58,000) Purchase of plant assets $ (200,000) Net cash used by investing activities $ (255,000) Cash flows from financing activities Repayment of bonds $   (72,000) Proceeds from issue of stock $      90,000 Dividend paid $   (52,060) Net cash used by financing activities $   (34,060) Net increase in cash and cash equivalents $      64,800 Cash and cash equivalents at beginning of period $      96,800 Cash and cash equivalents at end of period $   161,600

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