Question

Presented below is the 2016 income statement and comparative balance sheet information for Tiger Enterprises.

TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2016 ($ in thousands)
Sales revenue				$	12,500
Operating expenses:
Cost of goods sold	$	4,500
Depreciation		350
Insurance		650
Administrative and other		2,900
Total operating expenses					8,400
Income before income taxes					4,100
Income tax expense					1,640
Net income				$	2,460
Balance Sheet Information ($ in thousands)	Dec. 31, 2016			Dec. 31, 2015
Assets:
Cash	$	520		$	310
Accounts receivable		805			940
Inventory		805			710
Prepaid insurance		160			75
Plant and equipment		3,200			2,350
Less: Accumulated depreciation		(1,060	)		(710	)
Total assets	$	4,430		$	3,675
Liabilities and Shareholders' Equity:
Accounts payable	$	355		$	470
Payables for administrative and other expenses		355			510
Income taxes payable		270			260
Note payable (due 12/31/2017)		1,240			900
Common stock		1,000			910
Retained earnings		1,210			625
Total liabilities and shareholders' equity	$	4,430		$	3,675

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.) (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)

please show step by step solution

Answer 1

	Statement of Cash Flows
	For the Year Ended December 31, 2016
Cash Flows from Operating Activities:
Net income		2460
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	350
Decrease in Accounts receivables	135
Increase in inventory	-95
Increase in prepaid insurance	-85
Decrease in accounts payable	-115
Decrease in payables	-155
Increase in Income taxes payable	10
		45
Net cash provided by operating activities		2505
Cash Flows from Investing Activities:
Purchase of Plant Assets	-850
Net Cash Provided by Investing Activities		-850
Cash Flows from Financing Activities
Payment of Cash Dividends	-1875		=625+2460-1210
Proceeds from Notes Payable	340
Issuance of Common Stock	90
Net Cash Used by Financing Activities		-1445
Net Increase in Cash		210
Cash at Beginning of Period		310
Cash at End of Period		520