Chapter 13 HW Question-

Instructions:

A. Prepare a worksheet for a statement of cash flows

B. Prepare a statement of cash flows for 2015 by the indirect method(list any deduction in cash and cash outflows as negative amounts.

Chapter 13 instru velue: 10.00 points Satellite World was founded in 2014 to apply a new technology for efficiently transmitting closedcircuit (cable) television signals without the need for an in-ground cable. The company eamed a profit of $115 in 2014, its first year of operations, even though it was s company began dramatically expanding its customer base. Managem income to more than triple in each of the next five years. ering only a small test market. In 2015, the ent expects both sales and net Comparative balance sheets at the end of 2014 and 2015, the company's first two years of operations, follow. (Notice that the balances at the end of the current year appear in the right-hand column.) Additional Information The following information regarding the company's operations in 2015 is available in either the company's income statement or its accounting records: 1. Net income for the year was $440,000. The company has never paid a diidend. 2. Depreciation for the year amounted to $147,000. 3. During the year the company purchased plant assets costing $2,200,000, for which it paid $1,850,000 in cash and financed $350,000 by issuing a long-term note payable. (Much of the cash used in these purchases was provded by short-tem borrowing, as described below.) 4. In 2015, Satellite World borrowed $1,450,000 against a $5.5 million line of credit with a local bank. In its 5. Additional shares of capital stock (no par value) were issued to investors for $500,000 cash. balance sheet, the resulting obligations are reported as notes payable (short-term). SATELLITE WORLD COMPARATIVE BALANCE SHEETS December 31, 2014 2015 Assets Cash and cash equivalents Accounts receivable Plant and equipment (net of accumulated depreciation) 80,000 37,000 100,000 600,000 2,653,000 850,000 Totals $780,000 $3,540,000 Liabilities & Stockholders' Equity Notes payable (short-term) Accounts payable Accrued expenses payable Notes payable (long-tem) Capital stock (no par value) Retained eamings s-0$1,450,000 63,000 32,000 740,000 700,000 555,000 30,000 45,000 45 390,000 200,000 15,000 $780,000 $3,540,000 Totals