In: Accounting
Income Statement
For the Period Ended December 31, 2019
Sales | $636,000 |
Cost of goods sold | 240,000 |
Gross Profit | 396,000 |
Office expenses | 242,000 |
Depreciation Expense | 9,000 |
Income from Operations | 145,000 |
Interest expense | 0 |
Income before income tax | 145,000 |
Income tax expense | 120,000 |
Net Income | $25,000 |
Comparative Balance Sheets
December 31, 20XX
2019 | 2018 | |
Assets |
||
Cash and cash equivalents | 84,000 | 48,700 |
Accounts Receivable | 53,600 | 50,000 |
Inventory | 39,600 | 39,000 |
Prepaid expenses | 5,500 | 15,000 |
Equipment | 206,000 | 200,000 |
Accumulated Depreciation - Equipment | (126,700) | (117,700) |
Total assets | $262,000 | $235,000 |
Liabilities | ||
Accounts Payable | $48,000 | $49,000 |
Accrued Liabilities | 44,000 | 42,000 |
Stockholders' Equity | ||
Common Stock | 10,000 | 9,000 |
Retained Earnings | 160,000 | 135,000 |
Total Liabilities & S/H Equity | $262,000 | $235,000 |
Additional information:
Required:
Answer-
RAMOS COMPANY | ||
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD) | ||
FOR THE YEAR ENDED DECEMBER 31,2019 | ||
Particulars | Amount | |
$ | ||
Cash flow from operating activities | ||
Net income | 25000 | |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Adjustment for non cash effects | ||
Depreciation | 9000 | |
Change in operating assets & liabilities | ||
Increase in Accounts receivable | -3600 | |
Increase in inventory | -600 | |
Decrease in prepaid expenses | 9500 | |
Decrease in accounts payable | -1000 | |
Increase in accrued liabilities | 2000 | |
Net cash flow from operating activities (a) | 40300 | |
Cash Flow from Investing activities | ||
New Equipment purchased | -6000 | |
Net cash Flow from Investing activities (b) | -6000 | |
Cash Flow from Financing activities | ||
Common stock issued | 1000 | |
Net cash Flow from Financing activities (c) | 1000 | |
Net Change in cash c=a+b+c | 35300 | |
Beginning cash balance | 48700 | |
Closing cash balance | 84000 |