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Accounting

GREAT ADVENTURES, INC. Income Statement For the Year Ended December 31, 2017
Revenues:
Service revenue (clinic, racing, TEAM)	$ 539,000
Sales revenue (MU watches)	114,000

Total revenues		$ 653,000
Expenses:
Cost of goods sold (watches)	68,000
Operating expenses	304,076
Depreciation expense	48,000
Interest expense	29,524
Income tax expense	55,800

Total expenses		505,400

Net income		$ 147,600

GREAT ADVENTURES, INC. Balance Sheet December 31, 2017 and 2016
	2017		2016		Increase (I) or Decrease (D)
Assets
Current assets:
Cash	$	301,380	$	136,000	$	165,380	(I)
Accounts receivable		42,000		33,000		9,000	(I)
Inventory		16,700		13,800		2,900	(I)
Other current assets		12,700		10,800		1,900	(I)
Long-term assets:
Land		500,000		0		500,000	(I)
Buildings		1,000,000		0		1,000,000	(I)
Equipment		63,000		63,000
Accumulated depreciation		(72,750)		(24,750)		48,000	(I)

Total assets	$	1,863,030	$	231,850

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	11,700	$	8,800	$	2,900	(I)
Interest payable		730		730
Income tax payable		55,800		37,000		18,800	(I)
Long-term liabilities:
Notes payable		471,380		29,000		442,380	(I)
Stockholders' Equity:
Common stock		120,000		20,000		100,000	(I)
Paid-in capital		1,105,500		0		1,105,500	(I)
Retained earnings		169,420		136,320		33,100	(I)
Treasury stock		(71,500)		0		(71,500)	(I)

Total liabilities and stockholders' equity	$	1,863,030	$	231,850

Additional Information for 2017:

1.	Borrowed $480,000 in January 2017. Made 12 monthly payments during the year, reducing the balance of the loan by $37,620.
2.	Issued common stock for $1,200,000.
3.	Purchased 11,000 shares of treasury stock for $13 per share.
4.	Reissued 5,500 shares of treasury stock at $14 per share.
5.	Declared and paid a cash dividend of $114,500.

Required:

Prepare the statement of cash flows for the year ended December 31, 2017, using the indirect method.(List cash outflows as negative amounts.)

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9799868
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