Question

The income statement, balance sheets, and additional information for Apple Inc are provided.

Apple Inc. Income Statement For the Year Ended December 31, 2018
Revenues				$2,800,000
Gain on sale of land				4,000
Total revenues				2,804,000
Expenses:
Cost of goods sold		1,900,000
Operating expenses		575,000
Depreciation expense		38,000
Interest expense		16,000
Income tax expense		63,000
Total expenses				2,592,000
Net Income				$212,000
Apple Inc. Balance Sheets December 31
Assets		2018		2017
Current Assets:
Cash		$182,000		$187,000
Accounts receivable		83,000		95,000
Inventory		121,000		138,000
Prepaid rent		7,000		5,000
Long-Term Assets:
Investment in stock		195,000		100,000
Land		230,000		260,000
Equipment		305,000		225,000
Accumulated depreciation		(138,000)		(100,000)
Total Assets		$985,000		$910,000
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$40,000		$58,000
Interest payable	1,000		2,000
Income tax payable	12,000		10,000
Long-Term Liabilities:
Notes payable	285,000		205,000
Stockholders’ Equity:
Common stock	350,000		350,000
Retained earnings	297,000		285,000
Total Liabilities and Equity	$985,000		$910,000

Additional Information for 2018:
1. Purchase additional investment in stocks for $95,000.
2. Sell land costing $30,000 for $34,000 resulting in a $4,000 gain on sale of land.
3. Purchase $80,000 in equipment by borrowing $80,000 with a note payable due in three years. No cash is exchanged in the transaction.
4. The company declares and pays a cash dividend of $200,000.

Required: Prepare the statement of cash flows for Apple Inc. using the direct method. Disclose any noncash transactions in an accompanying footnote.

Answer 1