Karaoke Records Company Uses the Indirect Method to Prepare Its

question 51

Essay

Karaoke Records Company uses the indirect method to prepare its statement of cash flows.Refer to the following sections of the comparative balance sheet:
$\begin{array}{c} \text { Karaoke Records Company } &\\ \text { Comparative Balance Sheet } &\\ \text { December 31,2017 and 2016} &\end{array}$
$\begin{array}{lccc}&2017 & 2016 & \text { Increase/(Decrease) }\\\text { Accounts Payable } & \$ 6,000 & \$ 9,000 & \$(3,000) \\ \text { Accrued Liabilities } & 3,000 & 1,500 & 1,500 \\ \text {Long - term Notes Payable } & \underline{126,000} & \underline{135,000} & \underline{(9,000)} \\\text { Total Labilities } &\$ 135,000 & \$ 145,500 & \$(10,500) \\\end{array}$
$$\begin{array} { l l l l } \text { Common Stock } & 45,000 & 3,000 & 42,000 \\\text { Retained Earnings } & 169,500 & 111,000 & 58,500 \\\text { Treasury Stock } & \underline { ( 12,000 ) } & \underline { ( 7,500 ) } & \underline {( 4,500 )} \\\text { Total Equity } & 202,500 & 106,500 & 96,000\end{array}$$ $\text { Total Liabilities and Stockholders' Equity } \quad \$ \underline{337, 500} \quad \underline{\$ 252,000}\quad\underline{\$85,500}$
Additional information for 2017:
• No stock was retired.
• No treasury stock was sold.
• The company repaid $60,000 of long-term notes payable.
• The company borrowed $51,000 on a new long-term note payable.
• Net income for the year was $68,000.
Prepare the financing section of the statement of cash flows for the year ended December 31,2017.

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Definitions:

Standard Deviation

A metric that calculates how much a dataset's values spread out or diverge from their average.

Normally Distributed

Refers to a type of continuous probability distribution where data points are symmetrically distributed around the mean, forming a bell-shaped curve.

Variance

A measure of the dispersion or spread of a set of data points in a data set, representing the average squared deviation from the mean.

Standard Normal

A normal distribution with a mean of zero and a standard deviation of one, commonly used in statistical analyses.