Question

JOHNSTON ENTERPRISES          
BALANCE SHEET          
   31-Dec-17       31-Dec-16
Current Assets:          
Cash   $140,000        $120,000
Accounts Receivable   200,000       300,000
Inventory   400,000       300,000
Total Current Assets   740,000       720,000
Property, Plant, and Equipment   1,241,000       1,122,000
Less: Accumulated Depreciation   -476,000       -442,000
Total Assets   1,505,000       1,400,000
          
Current Liabilities:            
Accounts Payable   $201,000        $130,000
Notes Payable   40,000       60,000
Income Taxes Payable   90,000       70,000
Total Current Liabilities   331,000       260,000
Bonds Payable   300,000       400,000
Total Liabilities   631,000       660,000
          
Stockholders' Equity          
Common Stock   500,000       400,000
Retained Earnings   374,000       340,000
Total Stockholders' Equity   874,000       740,000
Total Liabilities & Stockholders' Equity   1,505,000       1,400,000
          
INCOME STATEMENT          
Sales Revenue   $1,580,000        $1,500,000
Less Cost of Goods Sold   770,000       740,000
Gross Profit Expenses:   810,000       760,000
          
Depreciation Expense   153,000       136,000
Salaries and Wages Expense   350,000       340,000
Interest Expense   41,000       31,000
Loss on Sale of Equipment   12,000       0
Income Before Taxes   254,000       253,000
Less Income Tax Expense   90,000       100,000
Net Income   164,000       153,000
ADDITIONAL INFORMATION          
During the year, Johnston sold equipment. The book value of the equipment          
was comprised of the following amounts:          
Original Cost:   153,000      
Accumulated Deprecation:   119,000      
          
During the year Johnston purchased new equipment as follows:          
Cost of new equipment:   272,000      
          
Dividends were paid during the year.          

Prepare a statement of cash flows for the year ending December 31, 2017. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

	Statement of Cash Flows
	For the Year Ended December 31, 2017
Cash Flows from Operating Activities:
Net income		164000
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	153000
Loss on sale of equipment	12000
Decrease in accounts receivable	100000
Increase in inventory	-100000
Increase in accounts payable	71000
Decrease in notes payable	-20000
Increase in tax payable	20000
		236000
Net cash provided by operating activities		400000
Cash Flows from Investing Activities:
Sale of equipment	22000
Purchase of equipment	-272000
Net Cash used by Investing Activities		-250000
Cash Flows from Financing Activities
Payment of Cash Dividends	-130000
Redemption of Bonds Payable	-100000
Issuance of common stock	100000
Net Cash Used by Financing Activities		-130000
Net Increase in Cash		20000
Cash at Beginning of year		120000
Cash at End of year		140000