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The balance sheet for Plasma Screens Corporation, along with additional information, are provided below:
| PLASMA SCREENS CORPORATION Balance Sheets December 31, 2018 and 2017 |
| | 2018 | 2017 |
| Assets: | | | | |
| Current assets: | | | | |
| Cash | $ | 154,350 | $ | 169,000 |
| Accounts receivable | | 74,400 | | 87,500 |
| Inventory | | 86,000 | | 71,900 |
| Prepaid rent | | 2,200 | | 1,100 |
| Long-term assets: | | | | |
| Land | | 435,000 | | 435,000 |
| Equipment | | 726,000 | | 625,000 |
| Accumulated depreciation | | (403,000) | | (250,000) |
| | | | | |
| Total assets | $ | 1,074,950 | $ | 1,139,500 |
| | | | | |
| Liabilities and Stockholders' Equity: | | | | |
| Current liabilities: | | | | |
| Accounts payable | $ | 90,000 | $ | 76,900 |
| Interest payable | | 6,750 | | 13,500 |
| Income tax payable | | 6,200 | | 4,100 |
| Long-term liabilities: | | | | |
| Notes payable | | 112,500 | | 225,000 |
| Stockholders' equity: | | | | |
| Common stock | | 655,000 | | 655,000 |
| Retained earnings | | 204,500 | | 165,000 |
| | | | | |
| Total liabilities and stockholders' equity | $ | 1,074,950 | $ | 1,139,500 |
Additional Information for 2018:
1. Net income is $60,000.
2. The company purchases $101,000 in equipment.
3. Depreciation expense is $153,000.
4. The company repays $112,500 in notes payable.
5 .The company declares and pays a cash dividend of $20,500.
Required:
Prepare the statement of cash flows using the indirect method.
Answer & Explanation
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