PROBLEM 2-4 statements for the JHJ Book Store are as follows: INCOME STATEMENT 2

Question

PROBLEM 2-4 statements for the JHJ Book Store are as follows: INCOME STATEMENT 2013 Cost of Books Sold Expenses on sale of land 4.500,000 500,000 300,000 500,000 500,000 Net Income BALANCE SHEET 2013 2012 100,000 125,000 150,000 100,000 (25,000) 2013 600,000 425.000 450,000 450,000 (225.000) Accounts Receivable lnventory Depreciation 550 Total Assets Accounts Payable Long Term Bond Payable Total Liabilities 100,000 100,000 300,000 200,000 800,000 400,000 50,000 Common Stock Retained Earnings Total Stockholders 1.700,000 550,000 Total Liabilities+ Stockholders Equity Required: Prepare Statement of Cash Flows 163 | P age

Explanation / Answer

Cash flow statement: Cashflows from Operating activities: Net Income for the year 500000 Adjustment required for reconciliation: Depreciation 200000 Increase in Accounts receivable -300000 Increase in Inventory -300000 Gain on sale of Land -500000 Increase in Accounts payable 200000 Net cash used in Operating activities -200000 Cashflows from Investing activities: Sale of land 600000 Purchasse of Equipment -350000 Net cash provided from Investing activities 250000 Cashflows from Financing activities: Long term liabilities borrowed 100000 Common Sstock issued 750000 Dividend paid (300000+500000-400000) -400000 Net cash provided from Financing activities 450000 Net cash increase 500000 Add: Beginning balance of cash 100000 Ending balance of cash 600000

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