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Presented below is the 2021 income statement and comparative balance sheet information for Tiger Enterprises.

Presented below is the 2021 income statement and comparative balance sheet information for Tiger Enterprises.

TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2021 ($ in thousands) $7,000 Sales revenue Operating

 

Required:
Prepare Tiger’s statement of cash flows, using the indirect method to present cash flows from operating activities.

 

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Expert Solution

  TIGER ENTERPRISES

           Statement of Cash Flows

For the Year Ended December 31, 2021

                   ($ in thousands)

 

Cash flows from operating activities:

          Net income                                                         $ 900

          Adjustments for noncash effects:

           Depreciation expense                                         240

          Changes in operating assets and liabilities:

           Decrease in accounts receivable                         80

           Increase in inventory                                           (40)

           Increase in prepaid insurance                           (30)

           Decrease in accounts payable                           (60)

           Decrease in accrued liabilities                         (100)

           Increase in income taxes payable                      50 

           Net cash flows from operating activities                 $1,040

 

Cash flows from investing activities:

          Purchase of equipment                                      (300)

           Net cash flows from financing activities                          (300)

 

Cash flows from financing activities:

          Issuance of common stock                                  100

          Issuance of notes payable                                   200

          Dividends paid to shareholders (1)                   (940)

           Net cash flows from financing activities         (640)

 

Net increase in cash                                                                        100

Cash, January 1                                                                                200

Cash, December 31                                                                      $ 300

(1)

Retained earnings, beginning        $540

+ Net income                                      900

– Dividends                                           ×                 x = $940

Retained earnings, ending                  $500

Retained earnings, ending                  $500

Raffay answered 2 years ago
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