Q31E
Question
Using a spreadsheet to prepare the statement of cash flows—indirect method Use the Boost Plus, Inc. data in Exercise E14-21 to prepare the spreadsheet for the 2018 statement of cash flows. Format cash flows from operating activities by the indirect method.
Step-by-Step Solution
VerifiedNet increase/(decrease) in cash is $26,000.
| Boost Plus Inc. Spreadsheet for statement of cash flows Year ended December 31, 2018 | ||||||
| Panel A-Balance Sheet | Balance 31/12/2017 | Transaction Analysis | Balance 31/12/2018 | |||
|
|
| Debit | Credit |
|
|
Cash | $13,000 |
|
|
|
| $39,000 |
Account receivables | $61,000.00 |
|
| $15,000.00 |
| $46,000 |
Land | $102,000.00 |
|
| $20,000.00 |
| $82,000 |
Plant Assets | $90,000 |
| $124,000 |
|
| $214,000 |
Accumulated Depreciation | ($34,000) |
|
| ($27,000) |
| ($61,000) |
Merchandise Inventory | $88,000 |
| $6,000 |
|
| $94,000 |
Total Assets | $320,000 |
| $130,000 | $8,000 |
| $414,000 |
|
|
|
|
|
|
|
Accounts Payable | $15,000 |
|
| $17,000 |
| $32,000 |
Accrued Liabilities | $20,000 |
| $8,000 |
|
| $12,000 |
Common Stock | $4,000 |
|
| $36,000 |
| $40,000 |
Notes Payable (Long-Term) | $15,000 |
|
| $1,000 |
| $16,000 |
Retained Earnings | $266,000 |
|
| $48,000 |
| $314,000 |
Total Liabilities and Shareholder’s Equity | $320,000 |
| $8,000 | $102000 |
| $414,000 |
|
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|
|
|
|
|
Panel B- Statement of Cash Flows |
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Cash Flows from Operating Activities |
|
|
|
|
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Net Income |
|
| $53,000 |
|
|
|
Adjustments to reconcile Net Income to Net cash provided by Operating Activities: |
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|
|
|
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Depreciating Expense |
|
| $27,000 |
|
|
|
Decrease in account receivables |
|
| $15,000 |
|
|
|
Increase in merchandise inventory |
|
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| $6,000 |
|
|
Increase in account payable |
|
| $17,000 |
|
|
|
Decrease in accrued liability |
|
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| $8,000 |
|
|
Net cash provided/ (used) in operating activities |
|
|
|
|
|
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Cash flow from Investing Activities: |
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|
|
|
|
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Purchase of plant |
|
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| $108,000 |
|
|
Sale of land |
|
| $20,000 |
|
|
|
Net cash provided/ (used) in Investing activities |
|
|
|
|
|
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Cash flow from Financing Activities: |
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|
|
|
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Issuance of common stock |
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| $36,000 |
|
|
|
Payment of notes payable |
|
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| $15,000 |
|
|
Dividend paid |
|
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| $5,000 |
|
|
Net cash provided/ (used) in financing activities |
|
|
|
|
|
|
Net increase/ (decrease) in cash |
|
|
| $26,000 |
|
|
|
|
| $168,000 | $168,000 |
|
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| Boost Plus Inc. Statement of Cash Flows (Partial) For the year ended December 31, 2018 | |
Non-cash Investing and financing activities |
|
Acquisition of land by issuing long-term notes payable | $16,000 |
Total Non-cash Investing and financing activities | $16,000 |