Prepare the 2018 statement of cash flows for Smolira Golf Corp. (Negative answer
ID: 2811928 • Letter: P
Question
Prepare the 2018 statement of cash flows for Smolira Golf Corp. (Negative answers should be indicated by a minus sign.)
SMOLIRA GOLF CORP.
2017 and 2018 Balance Sheets Assets Liabilities and Owners’ Equity 2017 2018 2017 2018 Current assets Current liabilities Cash $ 34,485 $ 37,928 Accounts payable $ 36,712 $ 42,632 Accounts receivable 17,851 27,856 Notes payable 19,108 16,275 Inventory 3,640 42,672 Other 19,954 24,714 Total $ 55,976 $ 108,456 Total $ 75,774 $ 83,621 Long-term debt $ 115,500 $ 174,101 Owners’ equity Common stock and paid-in surplus $ 55,100 $ 55,100 Accumulated retained earnings 273,922 315,417 Fixed assets Net plant and equipment $ 464,320 $ 519,783 Total $ 329,022 $ 370,517 Total assets $ 520,296 $ 628,239 Total liabilities and owners’ equity $ 520,296 $ 628,239
2018 Income Statement Sales $ 506,954 Cost of goods sold 359,678 Depreciation 44,588 Earnings before interest and taxes $ 102,688 Interest paid 19,783 Taxable income $ 82,905 Taxes (21%) 17,410 Net income $ 65,495 Dividends $ 24,000 Retained earnings 41,495
Prepare the 2018 statement of cash flows for Smolira Golf Corp. (Negative answers should be indicated by a minus sign.)
SMOLIRA GOLF CORP. Statement of Cash Flows For 2018 34,485 Cash, beginning of the year Operating activities Net income Add: Depreciation 65,495 44,588 Net cash from operating activities Investment activities Net cash from investment activities Financing activities Net cash from financing activities Cash, end of year
Explanation / Answer
Smolira Golf Corp.
Statement of Cash Flows
Plant and equipment account
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I. Operating activities Net income 65,495 Add: Depreciation 44,588 Interest 19,783 Tax 17,410 Operating profit before working capital changes 147,276 Less: Increase in current assets: Accounts receivable -10,005 Inventory -39,032 Less: Decrease in current liabilities (notes payable) -2,833 Add: Increase in current liabilities Accounts payable 5,920 Other 4,760 Less: Tax paid -17,410 Net cash flows from operating activities 88,676 II. Cash flows from Investing activities Purchase of plant and equipment -100,051 Net cash used ininvesting activities -100,051 III. Cash flows from Financing activities Issue of long term debt 58,601 Dividend paid -24,000 Interest paid -19,783 Net cash flows from Financing activities 14,818 Net increase in cash (I + II + III) 3,443 Cash balance, begining 34,485 Cash balance, ending 37,928