Chapter 4, Problem 4.20E

Statement of cash flows; indirect method

• LO4–8

TIGER ENTERPRISES

Income Statement

For the Year Ended December 31, 2018

($ in thousands)
Sales revenue		$7,000
Operating expenses:
Cost of goods sold	$3,360
Depreciation	240
Insurance	100
Administrative and other	1,800
Total operating expenses		5,500
Income before income taxes		1,500
Income tax expense		600
Net income		$ 900
Balance Sheet Information ($ in thousands)	Dec. 31, 2018	Dec. 31, 2017
Assets:
Cash	$ 300	$ 200
Accounts receivable	750	830
Inventory	640	600
Prepaid insurance	50	20
Plant and equipment	2,100	1,800
Less: Accumulated depreciation	(840)	(600)
Total assets	$3,000	$2,850
Liabilities and Shareholders’ Equity:
Accounts payable	$ 300	$ 360
Payables for administrative and other expenses	300	400
Income taxes payable	200	150
Note payable (due 12/31/2019)	800	600
Common stock	900	800
Retained earnings	500	540
Total liabilities and shareholders’ equity	$3,000	$2,850

Required:

Prepare Tiger’s statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments).