Question

The following financial information is obtained regarding Ellish Company:

                                                                              12/31/19                           12/31/18

Current Assets:

Cash                                                                     180,000                                46,000

Accounts Receivable (net)                                 140,000                                90.000

Merchandise Inventory                                     130,000                              150,000

Prepaid Expenses                                                  7,000                                   2,000

Supplies                                                                  3,000                                   4,000

Non-Current Assets:

Land                                                                   100,000                                      -0-

Plant Assets                                                       200,000                               200,000

Accumulated Depreciation                              (60,000)                               (40,000)

Total Assets                                                       700,000                               452,000

Current Liabilities:

Accounts Payable                                               25,000                                 33,000

Accrued Liabilities                                             15,000                                  9,000

Non-current Liabilities:

Notes Payable                                                   100,000                                 20,000

Total Liabilities:                                              140,000                                 62,000

Common Stock ($1 Par Value)                      200,000                                140,000

Common Stock-APIC                                      50,000                                   10,000

Retained Earnings                                          310,000                                240,000

Total Stockholders’ Equity                            560,000                                390,000

Additional Data:

A) 2019 Net Income was $170,000

B) Land was acquired by taking out a Notes Payable for $90,000 and paying Cash for the         balance .

C) All Common Stock was issued for Cash.

REQUIRED:

Prepare the Statement of Cash Flow for Ellish Company under the Indirect Method.

Answer 1