Question

The Jasper Corporation provides you with the following information for the year ended 12/31/17:

                                                            Income Statement Information:

                          Sales revenue $ 300,000

                          Cost of goods sold 80,000

                          Gross margin 220,000

                          Depreciation expense 47,000

                          Uncollectible accounts expense 1,500

                          Pension expense 19,000

                          Other expense 25,500

                          Interest expense 3,000

                          Gain on the sale of equipment (2,000)

                          Income tax expense 65,000 159,000

                                Net Income $   61,000

  

                                                               Balance Sheet Information

                                                                                   12/31/16           12/31/17                                             

Cash $ 16,000      $  36,000

                    Accounts Receivable                                 56,000               52,000

                    Allowance for Doubtful Accounts                 (6,000)              (5,000)

                    Inventory                                                   83,000               84,000

                    Equipment                                                85,000               82,000

                    Accumulated Depreciation                         (6,000)                (7,000)

                             Total                                             $228,000            $242,000

                    Accounts Payable                                   $ 36,000            $ 46,000

                    Income Taxes Payable                              66,000               48,000

                    Interest Payable                                          2,000                 1,000

                    Notes Payable, long term                           30,000                     0

                    Accrued Pension Liability                             4,000                 2,000

                    Deferred Tax Liability                                 14,000               18,000

                    Common Stock, no par                               70,000               80,000

                    Retained Earnings                                       6,000                47,000

                             Total                                             $228,000            $242,000

            Additional Information:

Equipment costing $66,000 was sold.  New equipment was purchased, and $10,000 of common stock was issued in partial payment for the new equipment.

a. Prepare a Statement of Cash Flows for Jasper Corporation for 2017 using the direct method. You must prepare all supplementary schedules that would be required disclosures under the direct method.

Show all work including formulas.

Answer 1

		CASH FLOW STATEMENTS
	CASH FLOW FROM OPERATING ACTIVITIES:					AMOUNT IN $
	CASH RECEIPTS FROM CUSTOMERS					304000
	CASH PAID TO SUPPLIERS					-71000
	PENSION PAID					-21000
						-70000
LESS:	INTEREST PAID					-4000
	INCOME TAX PAID					-83000
	NET CASH FROM OPERATIONS					55000
	CASH FLOW FROM INVESTING ACTIVITIES
	EQUIPMENT PURCHASED					-63000
	EQUIPMENT SOLD					68000
						5000
	CASH FLOW FROM FINANCING ACTIVITIES
	NOTES PAYABLE REDEEMED					-30000
	ISSUE OF COMMON STOCK					10000
	DIVD					-20000
						-40000
	CASH AND CASH EQUIVALENT					20000
	ADD: OPENING CASH					16000
	CLOSIN CASH BALANCE					36000 INCOME TAX PAYABLE BY OP 66000 CASH PAID 83000 I.TAX 65000 CL 48000 131000 131000 INTEREST PAYABLE BY OP 2000 CASH 4000 INT 3000 TO CL 1000 5000 5000 A/C RECEIVABLE OP 56000 SALES 300000 CASH 304000 BY CLO 52000 356000 356000 A/C PAY BY OP 36000 CASH 71000 PUR 81000 CL 46000 117000 117000 EQUIPMENT OP 85000 SOLD 66000 PUR 63000 CL 82000 148000 148000 RETAINED EARNING OP 6000 DIVIDEND 20000 c.y. 61000 CL 47000 67000 67000 PENSION PAYABLE OP 4000 CASH 21000 EXP 19000 CL 2000 23000 23000 INT payable op 2000 4000 exp 3000 cl 1000 5000 5000 INV OP 83000 PUR 81000 80000 CL 84000 164000 164000 COGS OP STOCK 83000 ADD: PUR 81000 LESS: CL STOCK -84000 COGS 80000