Question

The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below.

 

Additional Information for 2020:

1. Borrowed $510,000 in January 2020. Made 12 monthly payments during the year, reducing the balance of the loan by $37,656.

2. Issued common stock for $1,200,000.

3. Purchased 10,000 shares of treasury stock for $16 per share.

4. Reissued 5,000 shares of treasury stock at $17 per share.

5. Declared and paid a cash dividend of $120,000.

 

Required:

Prepare the statement of cash flows for the year ended December 31, 2020, using the indirect method. (List cash outflows as negative amounts.)

GREAT ADVENTURES, INC.

Income Statement

For the Year Ended December 31, 2020

  Revenues:

 

 

     Service revenue (clinic, racing, TEAM)

$ 545,000       

 

     Sales revenue (MU watches)

120,000       

 

 

 

 

       Total revenues

 

$ 665,000     

  Expenses:

 

 

         Cost of goods sold (watches)

71,000       

 

         Operating expenses

304,376       

 

         Depreciation expense

51,000       

 

         Interest expense

29,824       

 

         Income tax expense

57,600       

 

 

 

 

            Total expenses

 

513,800     

 

 

 

  Net income

 

$ 151,200