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Q31E

Expert-verified
Horngren'S Financial And Managerial Accounting
Found in: Page 782

Short Answer

Using a spreadsheet to prepare the statement of cash flows—indirect method Use the Boost Plus, Inc. data in Exercise E14-21 to prepare the spreadsheet for the 2018 statement of cash flows. Format cash flows from operating activities by the indirect method.

Net increase/(decrease) in cash is $26,000.

See the step by step solution

Step by Step Solution

Step 1: Statement of cash flows using indirect method

Boost Plus Inc.

Spreadsheet for statement of cash flows

Year ended December 31, 2018
Panel A-Balance Sheet

Balance

31/12/2017
Transaction Analysis

Balance

31/12/2018

Debit

Credit

Cash

$13,000

$39,000

Account receivables

$61,000.00

$15,000.00

$46,000

Land

$102,000.00

$20,000.00

$82,000

Plant Assets

$90,000

$124,000

$214,000

Accumulated Depreciation

($34,000)

($27,000)

($61,000)

Merchandise Inventory

$88,000

$6,000

$94,000

Total Assets

$320,000

$130,000

$8,000

$414,000

Accounts Payable

$15,000

$17,000

$32,000

Accrued Liabilities

$20,000

$8,000

$12,000

Common Stock

$4,000

$36,000

$40,000

Notes Payable (Long-Term)

$15,000

$1,000

$16,000

Retained Earnings

$266,000

$48,000

$314,000

Total Liabilities and Shareholder’s Equity

$320,000

$8,000

$102000

$414,000

Panel B- Statement of Cash Flows

Cash Flows from Operating Activities

Net Income

$53,000

Adjustments to reconcile Net Income to Net cash provided by Operating Activities:

Depreciating Expense

$27,000

Decrease in account receivables

$15,000

Increase in merchandise inventory

$6,000

Increase in account payable

$17,000

Decrease in accrued liability

$8,000

Net cash provided/ (used) in operating activities

Cash flow from Investing Activities:

Purchase of plant

$108,000

Sale of land

$20,000

Net cash provided/ (used) in Investing activities

Cash flow from Financing Activities:

Issuance of common stock

$36,000

Payment of notes payable

$15,000

Dividend paid

$5,000

Net cash provided/ (used) in financing activities

Net increase/ (decrease) in cash

$26,000

$168,000

$168,000

Step 2: Schedule of non-cash investing and financing activities

Boost Plus Inc.

Statement of Cash Flows (Partial)

For the year ended December 31, 2018

Non-cash Investing and financing activities

Acquisition of land by issuing long-term notes payable

$16,000

Total Non-cash Investing and financing activities

$16,000

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