Question

Using a spreadsheet to prepare the statement of cash flows—indirect method Use the Boost Plus, Inc. data in Exercise E14-21 to prepare the spreadsheet for the 2018 statement of cash flows. Format cash flows from operating activities by the indirect method.

Short answer

Net increase/(decrease) in cash is $26,000.

Step-by-step solution

Statement of cash flows using indirect method

Boost Plus Inc. Spreadsheet for statement of cash flows Year ended December 31, 2018
Panel A-Balance Sheet	Balance 31/12/2017		Transaction Analysis			Balance 31/12/2018
			Debit	Credit
Cash	$13,000					$39,000
Account receivables	$61,000.00			$15,000.00		$46,000
Land	$102,000.00			$20,000.00		$82,000
Plant Assets	$90,000		$124,000			$214,000
Accumulated Depreciation	($34,000)			($27,000)		($61,000)
Merchandise Inventory	$88,000		$6,000			$94,000
Total Assets	$320,000		$130,000	$8,000		$414,000
Accounts Payable	$15,000			$17,000		$32,000
Accrued Liabilities	$20,000		$8,000			$12,000
Common Stock	$4,000			$36,000		$40,000
Notes Payable (Long-Term)	$15,000			$1,000		$16,000
Retained Earnings	$266,000			$48,000		$314,000
Total Liabilities and Shareholder’s Equity	$320,000		$8,000	$102000		$414,000
Panel B- Statement of Cash Flows
Cash Flows from Operating Activities
Net Income			$53,000
Adjustments to reconcile Net Income to Net cash provided by Operating Activities:
Depreciating Expense			$27,000
Decrease in account receivables			$15,000
Increase in merchandise inventory				$6,000
Increase in account payable			$17,000
Decrease in accrued liability				$8,000
Net cash provided/ (used) in operating activities
Cash flow from Investing Activities:
Purchase of plant				$108,000
Sale of land			$20,000
Net cash provided/ (used) in Investing activities
Cash flow from Financing Activities:
Issuance of common stock			$36,000
Payment of notes payable				$15,000
Dividend paid				$5,000
Net cash provided/ (used) in financing activities
Net increase/ (decrease) in cash				$26,000
			$168,000	$168,000

Schedule of non-cash investing and financing activities

Boost Plus Inc. Statement of Cash Flows (Partial) For the year ended December 31, 2018
Non-cash Investing and financing activities
Acquisition of land by issuing long-term notes payable	$16,000
Total Non-cash Investing and financing activities	$16,000