Use the following information to prepare a statement of cash flows (indirect method) for Sink Industries for the year ended December 31, 2018, and calculate ending cash flows: Net income for the year 2018 was $5,000. Accounts receivable decreased $2,000, while inventories increased $4,000, and accounts payable decreased $7,000. Depreciation expense included in net income was $8,000. During the year, a piece of land held for future expansion was sold for its book value of $8,000, and a new service truck was purchased for $14,000. The company borrowed $18,000 on a two-year note from the bank. Dividends of $6,000 were paid in cash. preferred stock was issued to retire $7,000 of long-term notes payable. The beginning cash balance was $10,000.
Use the following information to prepare a statement of cash flows (indirect method) for Sink Industries for the year ended December 31, 2018, and calculate ending cash flows: Net income for the year 2018 was $5,000. Accounts receivable decreased $2,000, while inventories increased $4,000, and accounts payable decreased $7,000. Depreciation expense included in net income was $8,000. During the year, a piece of land held for future expansion was sold for its book value of $8,000, and a new service truck was purchased for $14,000. The company borrowed $18,000 on a two-year note from the bank. Dividends of $6,000 were paid in cash. preferred stock was issued to retire $7,000 of long-term notes payable. The beginning cash balance was $10,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- Use the following information to prepare a statement of
cash flows (indirect method) for Sink Industries for the year ended December 31, 2018, and calculate ending cash flows:
Net income for the year 2018 was $5,000.
During the year, a piece of land held for future expansion was sold for its book value of $8,000, and a new service truck was purchased for $14,000.
The company borrowed $18,000 on a two-year note from the bank. Dividends of $6,000 were paid in cash.
The beginning cash balance was $10,000.
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