Financial information for Flagstone Inc.'s balance sheet for fiscal 2018 and 2017 follows:
Additional information:
1.Preferred shares were converted to common shares during the year at their book value.
2.The recorded increase in the bonds payable account was due to the amortization of the discount.
3.Net income was $318,000.
4.There was a common stock dividend valued at $20,000 and cash dividends were also paid.
5.Interest expense for the year was $95,000.Income tax expense was $57,000.
6.Flagstone arranged for a $500,000 bank loan to finance the purchase of the equipment.
7.Flagstone has adopted a policy of reporting cash flows arising from the payment of interest and dividends as operating and financing activities,respectively.
8.The held-for-trading investments are not cash equivalents.
9.Sales = 1,900,000; cost of goods sold = 450,000; and,sales and administration expenses = 980,000 (includes depreciation expense)
Required:
Prepare a statement of cash flows for the year ended December 31,2018 using the indirect method.

Question

Financial information for Flagstone Inc.'s balance sheet for fiscal 2018 and 2017 follows:
  Additional information:
1.Preferred shares were converted to common shares during the year at their book value.
2.The recorded increase in the bonds payable account was due to the amortization of the discount.
3.Net income was $318,000.
4.There was a common stock dividend valued at $20,000 and cash dividends were also paid.
5.Interest expense for the year was $95,000.Income tax expense was $57,000.
6.Flagstone arranged for a $500,000 bank loan to finance the purchase of the equipment.
7.Flagstone has adopted a policy of reporting cash flows arising from the payment of interest and dividends as operating and financing activities,respectively.
8.The held-for-trading investments are not cash equivalents.
9.Sales = 1,900,000; cost of goods sold = 450,000; and,sales and administration expenses = 980,000 (includes depreciation expense)
Required:
Prepare a statement of cash flows for the year ended December 31,2018 using the indirect method.

Quizplus · Accepted Answer

The Answer of Financial information for Flagstone Inc.'s balance sheet for fiscal 2018 and 2017 follows:
  Additional information:
1.Preferred shares were converted to common shares during the year at their book value.
2.The recorded increase in the bonds payable account was due to the amortization of the discount.
3.Net income was $318,000.
4.There was a common stock dividend valued at $20,000 and cash dividends were also paid.
5.Interest expense for the year was $95,000.Income tax expense was $57,000.
6.Flagstone arranged for a $500,000 bank loan to finance the purchase of the equipment.
7.Flagstone has adopted a policy of reporting cash flows arising from the payment of interest and dividends as operating and financing activities,respectively.
8.The held-for-trading investments are not cash equivalents.
9.Sales = 1,900,000; cost of goods sold = 450,000; and,sales and administration expenses = 980,000 (includes depreciation expense)
Required:
Prepare a statement of cash flows for the year ended December 31,2018 using the indirect method.

Financial Information for Flagstone Inc