Question

5. Below are the balance sheets and income statement for Kinder Care Company. Please prepare the statement of cash flows for 2018 on both the indirect and direct bases.

	Kinder Care Company
	Balance Sheet
		December 31
		2018	2017	Change
	Cash	140,000	111,200
	Accounts receivable (net)	30,000	20,300
	Inventory	50,000	26,000
	Long-term investments	-0-	30,000	(30,000)
	Property, plant & equipment	270,000	150,000	120,000
	Accumulated depreciation	(70,000)	(25,000)	(45,000)
	Accounts payable	50,000	35,500
	Accrued liabilities	30,000	27,000	3,000
	Long-term notes payable	70,000	50,000	20,000
	Common stock	200,000	145,000
	Retained earnings	Calculate	55,000
			312,500

Sales Revenue………………………………………………..	600,000
Cost of goods sold…………………………………………	400,000
Gross margin …………………..
Operating expenses…………………………………………	100,000
Pre-tax operating income
Loss on sale of investments	(25,000)
Pre-tax income
Tax tax rate 20%
Net income………………………………………………………	$

Additional data: Purchased machinery issuing a $20,000 note and paying remainder in cash. Dividends were declared and paid Allowance for doubtful accounts balance of $1,000 was included in accounts receivable each year

Answer 1