Instructions:
1. Prepare the 20X8 statement of cash flows, formatting operating activities by using the indirect method.
2. How will what you learned in this problem help you evaluate an investment?
Current assets:
Cash and cash equivalents ..... $17,600 $5,300 $12,300
Accounts receivable ....................... 27,200 27,600 (400)
Inventories.............................. 83,600 87,200 (3,600)
Prepaid expenses............................ 2,500 1,900 600
Plant assets:
Land..................................... 89,000 60,000 29,000
Equipment,net ............... 53,500 49,400 4,100
Total assets..........................$273,400 $231,400 $ 42,000
Current liabilities:
Accounts payable.................... $ 35,800 $ 33,700 $2,100
Salary payable ............................... 3,100 6,600 (3,500)
Other accrued liabilities ................. 22,600 23,700 (1,100)
Long-term liabilities:
Notes payable................................ 75,000 100,000 (25,000)
Stockholders' equity:
Common stock, no-par.................. 88,300 64,700 23,600
Retained earnings .......................... 48,600 2,700 45,900
Total liabilities and stockholders’ equity..... $ 273,400 $ 231,400 $ 42,000
4 Season Supply Corp.
Income Statement for 20X8
Revenues:
Sales revenue ................................. $ 228,700
Expenses:
Cost of goods sold ......................... $ 70,600
Salary expense ............................... 27,800
Depreciation expense..................... 4,000
Other operating expense................ 10,500
Interest expense ............................. 11,600
Income tax expense ....................... 29,100
Total expenses ............................... 153,600
Net income……….. $ 75,100
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