Learning Objective 2
Net Cash Prov. by Op.
Act. $98,000
E16-21 Preparing the statement of cash flows-indirect method
The income statement of Boost Plus, Inc. follows:
BOOST PLUS, INC.
Income Statement
Year Ended September 30, 2018
Net Sales Revenue
Cost of Goods Sold
Gross Profit
$ 231,000
94,000
137,000
Operating Expenses:
Salaries Expense
$ 54,000
Depreciation Expense-Plant Assets
27,000
Total Operating Expenses
81,000
Net Income Before Income Taxes
56,000
Income Tax Expense
3,000
Net Income
$ 53,000
Additional data follow:
a. Acquisition of plant assets is $124,000. Of this amount, $108,000 is paid in cash
and $16,000 by signing a note payable.
b. Cash receipt from sale of land totals $20,000. There was no gain or loss.
c. Cash receipts from issuance of common stock total $36,000.
d. Payment of notes payable is $15,000.
e. Payment of dividends is $5,000.
f. From the balance sheet:
September 30
2018
2017
Cash
$ 39,000
$ 13,000
Accounts Receivable
46,000
61,000
Merchandise Inventory
94,000
88,000
Land
82,000
102,000
Plant Assets
214,000
90,000
Accumulated Depreciation
(61,000)
(34,000)
Accounts Payable
32,000
15,000
Accrued Liabilities
12,000
20,000
Notes Payable (long-term)
16,000
15,000
Common Stock, no par
40,000
4,000
Retained Earnings
314,000
266,000
Prepare Boost Plus's statement of cash flows for the year ended September 30, 2018,
using the indirect method. Include a separate section for non-cash investing and
financing activities.
