Below is the income statement and comparative balance sheets of the Wolff Company. WOLFF COMPANY Income statement
Question:
Below is the income statement and comparative balance sheets of the Wolff Company.
WOLFF COMPANY
Income statement
For the year ended December 31, 2017
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $635,000
Cost of goods sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $430,000
Salary expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,000
Insurance expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Depreciation expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000
Interest expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000
Income from tax expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,000 579,000
Net lngresos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $56,000
Balance sheet of the WOLFF COMPANY
December 31, 2017 December 31, 2016
Cash............................................... .. ..$11,000$5,000
Accounts receivable. . . . . . . . . . . . . . . 41,000 32,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . 90,000 60,000
prepaid insurance. . . . . . . . . . . .. . . . . 5,000 7,000
EPP. . . . . . . . . . . . . . . . .. . . . . . . . . 250.000 195.000
Accumulated depreciation . . . . . . . .. (68,000) (51,000)
Total assets. . . . . . . . . . . . . . . . . . . $329,000 $248,000
Liabilities and Equity
December 31, 2017 December 31, 2016
Accounts Payable...................................$7,000$10,000
Salaries to pay . . . . . . . . . . . . . . . . . . 9,000 6,000
Income tax payable. . . . . . . . . . .. . . . 7,000 8,000
Obligations with the public. . . . . . . . . . . . . . . . . . 130,000 75,000
Common actions. . . . . . . . . . . . . . . . . . 90,000 90,000
Retained earnings. . . . . . . . . . . . . . . 86,000 59,000
Total liabilities and equity. . . . . . . . $329,000 $248,000
Cash dividends of $29,000 were declared and paid during 2017. Also in 2017, PPE was purchased for cash and bonds payable for cash were issued. Bond interest is paid semi-annually on June 30 and December 31. Accounts payable correspond to merchandise purchases.
Required
to. Calculate the change in cash that occurred during 2017.
b. Prepare a statement of cash flows for 2017 using the indirect method.
Expert Answer:
a To calculate the change in cash that occurred during 2017 we need to take into account all cash in... View the full answer
