Chapters 14 15 1617 Saved December 31 2018 and 2017 2018 Ass

(Chapters 14, 15, 16&17) Saved December 31, 2018 and 2017 2018 Assets Cash Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity 2017 $ 56, 990 57,100 14, 180 17,300 126, 40100,89 197,480 174, 400 78,000 59,200 (31,700)(21,809) $235,700 $211,800 36 s 33,700 S 36,209 800 34, 30 37, e00 608 170, 890157, 400 31,4017.480 $235, 70e $211,880 MONTGOMERY INC. Income Statenent For Year Ended Decenber 31, 2018 Sales Cost of goods sold Gross profit Operating expenses $ 61, 500 (25, 569) 36, 000 $9,980 7, 600 Depreciation expense Other expenses Total operating expense Income before taxes Income tax expense Net income 17, 598 18, 500 4, 580 s 14, 806 (Prey 10f 2 Next >

Solution

MONTGOMERY, INC.

Statement of Cash Flows (Indirect Method)

For year ended December 31, 2018

Net Income----------------(a)

14000

Adjustments to reconcile net income to net cash provided by operations:

Income statement items not affecting cash

Depreciation

9900

Changes in current operating assets and liabilities:

Decrease in Accounts Receivables

+3200

Increase in Inventory

-26400

Decrease in Accounts payable

-2500

Decrease in Salary payable

-200

Cash used in operating activities--------(b)

-16000

Cash flow from Investing Activities:

Purchase of equipment

-10800

Cash used in investing activities-------(c)

-10800

Cash flow from Financing Activities:

Proceeds from issue of additional stock

+12600

Cash provided by financing activities------(d)

+12600

Net Decrease in Cash [a-b-c-d]

-200

Beginning cash balance

57100

Ending cash balance

$ 56900

MONTGOMERY, INC.
Statement of Cash Flows (Indirect Method)
For year ended December 31, 2018
Net Income----------------(a)		14000
Adjustments to reconcile net income to net cash provided by operations:
Income statement items not affecting cash
Depreciation	9900
Changes in current operating assets and liabilities:
Decrease in Accounts Receivables	+3200
Increase in Inventory	-26400
Decrease in Accounts payable	-2500
Decrease in Salary payable	-200
Cash used in operating activities--------(b)		-16000
Cash flow from Investing Activities:
Purchase of equipment	-10800
Cash used in investing activities-------(c)		-10800
Cash flow from Financing Activities:
Proceeds from issue of additional stock	+12600
Cash provided by financing activities------(d)		+12600
Net Decrease in Cash [a-b-c-d]		-200
Beginning cash balance		57100
Ending cash balance		$ 56900