Question

Below is a condensed Income Statement for the SPECTRE Company for 2018 along with balance sheet information
	income statement
	service revenue		3,660,000
	Operating expenses		2,700,000
	income b4 income tax		960,000
	Income tax expense		288,000
	Net income		672,000
	Balance sheets
		12/31/2018		12/31/2017
Cash		1,317,000		270000		1,047,000
accounts receivable		480,000		360,000
Wages payable		330,000		240,000
Income taxes payable		90,000		165,000
Additional information
	a) During the year Sprectre issued common stock for $420,000
	b) Long-term investments were sold by Spectre during the year for $210,000. Spectre had originally purchased the investments for $210,000
	c) During the year Spectre paid cash dividends of $300,000 to its owners
	d) Spectre has no outstanding debt except for those listed in the partial balance sheet
	e) Operating expenses include $150,000 in depreciation expense
REQUIRED:   PREPARE A 2018 CASH FLOW STATEMENT FOR SPECTRE.

Answer 1

Spectre Company
Statement of Cash Flows
For the year ended December 2018
Net Income	$ 672,000.00
Adjustments
Depreciation and amortization	$ 150,000.00
Cash Provided by Operating Assets and Liabilities
Increase in Accounts Receivable	-$ 120,000.00
Increase in wages payable	$ 90,000.00
Decrease in income taxes payable	-$ 75,000.00
Net Cash provided (used) by operating activities	$ 717,000.00
Cash Provided from Investing Activities
Sale of long term investments	$ 210,000.00
Net Cash provided (used) by investing activities	$ 210,000.00
Cash Provided from Financing Activities
Issue of common stock	$ 420,000.00
Payment of cash dividends	-$ 300,000.00
Net Cash provided (used) by financing activities	$ 120,000.00
Net Cash Flow	$ 1,047,000.00
Cash and cash equivalents at the beginning of year	$ 270,000.00
Cash and cash equivalents at the end of year	$ 1,317,000.00