Answer:
Plasma Screens Corporation
Statement of Cash Flows for the year ended December 31, 2021
Operating activities:
Net income $77,000
Add Non-cash flows:
Depreciation expense 152,000
Adjusted net operating income $229,000
Changes in working capital:
Accounts receivable 14,800
Inventory -15,800
Prepaid rent -2,800
Accounts payable 14,800
Interest payable -6,900
Income tax payable 3,800
Net operating cash flows $236,900
Investing activities:
Purchase of equipment -$112,000
Financing activities:
Repayment of Notes payable -$115,000
Dividends payment -29,000
Net cash flow from financing -$144,000
Net cash flows -$19,100
Reconciliation of cash:
Beginning Cash balance $131,800
Net cash flows -$19,100
Ending Cash balance $112,700
Explanation:
a) Data and Calculations:
PLASMA SCREENS CORPORATION
Balance Sheets
December 31, 2021 and 2020
2021 2020 Change
Assets
Current assets:
Cash $ 112,700 $131,800 -$19,100
Accounts receivable 81,200 96,000 -14,800
Inventory 103,000 87,200 +15,800
Prepaid rent 5,600 2,800 +2,800
Long-term assets:
Land 520,000 520,000 0
Equipment 822,000 710,000 +112,000
Accumulated depreciation (436,000 ) (284,000) +152,000
Total assets $ 1,208,500 $1,263,800
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 107,000 $ 92,200 +$14,800
Interest payable 6,900 13,800 -6,900
Income tax payable 9,600 5,800 +3,800
Long-term liabilities:
Notes payable 115,000 230,000 -115,000
Stockholders' equity:
Common stock 740,000 740,000 0
Retained earnings 230,000 182,000 +48,000
Total liabilities & stockholders' equity $ 1,208,500 $1,263,800
Additional Information for 2021:
Net income is $77,000.
The company purchases $112,000 in equipment.
Depreciation expense is $152,000.
The company repays $115,000 in notes payable.
The company declares and pays a cash dividend of $29,000
