The Following Selected Financial Statement Information Is for Abel Inc

question 47

Essay

The following selected financial statement information is for Abel Inc.
Abel Inc.
Income Statement
For the Year Ended December 31, 2017
$\begin{array}{lr}\text { Sales } & \$ 2,600,000 \\\text { Cost of goods sold } & 1,640,000 \\\text { Gross margin } & 960,000 \\\text { Selling and administrative expenses } & 356,000 \\\text { Depreciation expense } & 84,000 \\\text { Operating income } & 520,000 \\\text { Gain on sale of equipment } & 6,400 \\\text { Income before taxes } & 526,400 \\\text { Income tax expense } & 184,240 \\\text { Net income } & -342,160\end{array}$
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { December } 31$ $\begin{array}{lrr}&2017&2016\\\text { Current Assets }\\\text { Cash } & \$ 160,000 & \$ 128,000 \\\text { Accounts receivable } & 40,000 & 32,000 \\\text { Merchandise inventory } & 50,000 & 64,000 \\\text { Prepaid expenses } & 16,000 & 10,800\\\\\text { Current Liabilities } & & \\ \text { Accounts payable } & 18,000 & 14,800 \\\text { Income tax payable } & 8,800 & 7,200\end{array}$
Using the indirect method,prepare the operating activities section of the statement of cash flows for Abel Inc.for the year ended December 31,2017.

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Definitions:

Dividend

A payment made by a corporation to its shareholders, usually derived from profits.

Stock Owners

Individuals or entities that hold shares of stock in a corporation, representing partial ownership of that corporation.

Par Preferred Stock

Preferred shares of a company's stock with a fixed face value that typically determines dividend payments.

Par Common Stock

This is a classification of common stock that has a nominal value assigned in the corporate charter and is used in the accounting records.