In: Accounting
Blackwell Company's income statement for 2020 consisted of: | ||||||||
Revenues | 1,220,000 | |||||||
Cost of goods sold | 627,000 | |||||||
Operating expenses | 295,000 | |||||||
Depreciation expense | 60,000 | |||||||
Interest expense | 26,000 | |||||||
Gain on the sale of machinery | (12,000) | |||||||
Loss on the sale of investments | 8,000 | 1,004,000 | ||||||
Income before income tax | 216,000 | |||||||
Income tax expense | 40,000 | |||||||
Net income | 176,000 | |||||||
Blackwell's comparative balance sheet information for 2020 included: | ||||||||
12/31/20 | 12/31/19 | |||||||
Accounts receivable | 268,000 | 257,000 | ||||||
Accounts payable | 47,000 | 42,000 | ||||||
Income taxes payable | 17,000 | 13,500 | ||||||
Interest payable | 9,000 | 7,500 | ||||||
Bonds payable | 500,000 | 500,000 | ||||||
Discount on bonds payable | 26,000 | 28,000 | ||||||
Prepare the Cash flows from operating activities section of Blackwell's 2020 Statement of Cash Flows using the indirect method | ||||||||
and the required disclosures for interest and income tax expense. |
Net Income | $ 176,000 | |
Add | ||
Depreciation | $ 60,000 | |
Interest expense | $ 26,000 | |
Loss on sale of investment | $ 8,000 | |
Income Tax | $ 40,000 | |
Amortisation | $2000 | $ 136,000 |
Less- | ||
Gain on the sale of machinery | $ (12,000) | |
Interest Paid | $ (24,500) | |
Income Tax paid | $ (36,500) | $ (73,000) |
Fund Flow before changes in Working Capital | $ 239,000 | |
Less - Increase in Accounts receivable | $ (11,000) | |
Add - Increase in Accounts Payable | $ 5,000 | |
Changes in Working capital | $ (6,000) | |
Cashflow from operations | $ 233,000 |
Opening Income Tax Payable | 13,500.00 |
Add - Current Yr Income Tax | 40,000.00 |
Less - Closing Income Tax Payable | -17000 |
Cash Paid for Income Tax | 36,500.00 |
Opening Interest Payable | 7,500.00 |
Add - Interest exp | 26,000.00 |
Less - Closing Interest Payable | -9000 |
Cash Paid for Interest | 24,500.00 |