Question

3.) Condensed financial statements for Dragoon Enterprises follows:

a.) Calculate the amount of dividends Dragoon paid using the information given.

b.) Prepare a statement of cash flows using the indirect method.

                                                                                                              2015                2014

Cash                                                                                                    $1,200             $ 850

Accounts receivable                                                                           1,750               1,200

Inventory                                                                                            1,250               1,360

Plant and equipment                                                                           4,600            3,900

            Accumulated depreciation                                                      (1,200)             (1,100)

Long-term investments                                                                             970             1,110

            Total Assets                                                                               8,570              7,320

Accounts payable                                                                                  1,100               800

Accrued wages payable                                                                         250                  350

Interest payable                                                                                         70                   120

Incomes tax payable                                                                               200                     50

Bonds payable                                                                                    1,100              1,400

Capital stock                                                                                       1,000                   930

Paid-in capital                                                                                         400                     70

Retained earnings                                                                               4,450                 3,600

            Total Liabilities and Equity                                                  $ 8,570                $ 7,320

___________________________________________________________________________________________

Income Statement for Year Ended December 31, 2015

Sales                                                                                                    $ 9,500

Cost of goods sold                                                                                 6,650

Gross profit                                                                                            2,850

Other expenses

            Selling and administrative                                                      1,200

            Depreciation                                                                                 100           

            Interest                                                                                          150

            Income Tax                                                                                   350

Net Income                                                                                         $ 1,050

Answer 1

Answer a
Calculation of the amount of dividends Dragoon paid
Retained Earnings 2014	$3,600.00
Add : Net Income for 2015	$1,050.00
Retained Earnings 2015	$4,450.00
Amount of Dividends Dragoon Paid	$200.00
Answer b
A statement of cash flows using the indirect method.
Cash flow from Operating Activities
Net Income		$1,050.00
Adjustments
Depreciation	$100.00
Increase in Accounts Receivables	-$550.00
Decrease in Inventory	$110.00
Increase in Accounts Payable	$300.00
Decrease in Accrued wages Payable	-$100.00
Decrease in Interest Payable	-$50.00
Increase in Income Tax payable	$150.00	-$40.00
Net Cash available from Operating activities		$1,010.00
Cash flow from Investing Activities
Purchase of Plant and equipment	-$700.00
Sale of long term investment	$140.00
Net cash used for Investing activities		-$560.00
Cash flow from financing activities
Repayment of bonds Payable	-$300.00
Issue of Capital stock	$400.00
Dividend paid	-$200.00
Net Cash used for Financing activities		-$100.00
Net Cash surplus / (deficit)		$350.00
Add : Cash balance 2014		$850.00
Cash balance 2015		$1,200.00