Question

IX Note: To complete the assignment to the worksheet tab labeled Cash Flow 1 Note: To complete the assignment, go to the worksheet tab labeled Cash Flow 2 and complete the statement of cash flows. INNOVATION ELECTRONICS, INC. HYGN For the Year Ended December 31, 20X2 Net sales $ Gain on sale of land 2,430,000 6,500 Total revenues 2.436,500 T $ Expenses: Cost of goods sold Operating expenses Depreciation expense Interest expense Income tax expense 1.565.000 598.000 16.000 17.000 63,000 17 19 Total expenses 2 21 Net Income IS 177.500 . .. Income Statement Balance Sheet Cash Flow READY

Answer 1

Innovation Electronics, INC. Statement of Cah Flow For the year ended December 31,2012 $ Amount in $ 1,77,500 $ 1,77,500 $ 16000 -6500 CASH FLOWS FROM OPERATING ACTIVITIES Net Income Adjustments to reconcile: Add: Deprecication Sub: Gain (on sale of land) (Already included in Net income) Changes in Current Asset and Current Liabilty: Decrease in Accounts Receivable (83000-68700) Bereivable 183002.597001 Increase in Inventory (128000-134500) Decrease in Prepaid insurance (4560-2980) Decrease in Accounts Payable (81000-26500) Increase in Interest Payable (2300-3400) Increase in Income tax payable (32500-30200) Net cash provided by (used in) operating activities 14300 -6500 1580 -54500 1100 -2300 36,820 CASH FLOWS FROM INVESTING ACTIVITIES Purchase Investments sale of land (46500+6500) Net cash provided by (used in) investing activities 91000 53000 S -38,000 43000 13000 CASH FLOWS FROM FINANCING ACTIVITIES Issue common stock Isssue long term note Net cash provided by (used in) financing activities Net increase in cash and cash equivalents Cash and Cash Equivalents at Beginning of period Cash and Cash Equivalents at End of period $ 56.000 $ $ $ 1,58,680 25,740 1,84,420

Working note:

Depreciation added to net income and gain on sale is subtracted to net income.

IF Decreases in current asset ---> Add

Increases in current asset -----> Subtract

Increase in current liability -----> Add

Decreases in current liability ----> Subtract.

If purchase of fixed asset leads cash outflow, if sale on fixed asset leads to cash inflow,

if, issue of common stock,Long term note--- cash inflow.

Land is sold with profit of 6500. Hnce, sale value is 46500+6500=53000

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