Question

Presented below is the 2018 income statement and comparative balance sheet information for Tiger Enterprises.

TIGER ENTERPRISES
Income Statement
For the Year Ended December 31, 2018
($ in thousands)
Sales revenue								$	9,000
Operating expenses:
Cost of goods sold		$	3,800
Depreciation			280
Insurance			300
Administrative and other			2,200
Total operating expenses									6,580
Income before income taxes									2,420
Income tax expense									968
Net income								$	1,452
Balance Sheet Information ($ in thousands)	Dec. 31,2018						Dec. 31, 2017
Assets:
Cash		$	380					$	240
Accounts receivable			770						870
Inventory			700						640
Prepaid insurance			90						40
Plant and equipment			2,500						2,000
Less: Accumulated depreciation			(920	)					(640	)
Total assets		$	3,520					$	3,150
Liabilities and Shareholders' Equity:
Accounts payable		$	320					$	400
Payables for administrative and other expenses			320						440
Income taxes payable			220						190
Note payable (due 12/31/2019)			1,040						800
Common stock			980						840
Retained earnings			640						480
Total liabilities and shareholders' equity		$	3,520					$	3,150

Required:
Prepare Tiger’s statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments). (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)
  

Answer 1

Statement of Cash Flow
Particulars	Amount	Total Amount
Income	1,452.00
Add Income Tax expense	968.00
Depreciation	280.00
Amortisation of intangible
Decrease in AR	100.00
Increase in inventory	(60.00)
Increase in prepaid insurance	(50.00)
Decrease in AP	(80.00)
Decrease in Payables for administrative and other expenses	(120.00)
Income Taxes paid = 190 + 968 - 220	(938.00)
Cash flow from operating activities		1,552.00
Cash flow from Investing activities
Purchase of PPE	(500.00)
Cash flow from Investing activities		(500.00)
Cash flow from Financing activities
Issue of Stock	140.00
Issue of Notes payable	240.00
Dividends Paid = 1452 - (640 -480)	(1,292.00)
Cash flow from Financing activities		(912.00)
net change in cash and cash equivalents		140.00
Opening cash and cash equivalents		240.00
Closing cash and cash equivalents		380.00