The following comparative balance sheets and income statement are available for ABC Inc. Prepare a statement of cash flows for 2016 using the indirect method and analyze the statement.
December 31, 2016 2015
Cash $ 3 300 $1 000
Accounts receivable(net) 1,100 600 I
inventory 11,200 4,300
Total Current Assets $15,600 $5,900
Plant and equipment $ 3,000 $2,300
Less accumulated depreciation (1,300) (800)
Plant and equipment (net) $ 1,700 $1,500
Long-term invesbnents 1,200 900
Total Assets $18,500 $8,300
Accounts payable $ 3 300 $2,500
Accrued liabilities 700 600
Income taxes payable 400 100
Total Current Liabilities $ 4,400 $3,200
Long-term debt 200 0
Total Liabilities $ 4,600 $3,200
Common stock ($1par) and additional paid-in capital 9,900 7,300
Retained earnings 4,000 (2,200)
Total Liabilities and Equity $18,500 $8,300
Income Statement for 2016
Sales $94 000
Cost of goods sold 55 000
Gross profit $39,000
Selling and administrative 28,800
Depreciation 500 29,300
Operating profit $ 9,700 I
interest expense 100
Earnings before tax $ 9 600
Tax expense 3 400
Net income $ 6,200