Wickersham Brothers Inc. is developing its annual financial statements at Decemb

Question

Wickersham Brothers Inc. is developing its annual financial statements at December 31, 2011. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized.

252,000

Tax expense ($4,000) and interest expense ($3,000) were paid in full at the end of both years and are included in other expenses.

Prepare the statement of cash flows for 2011 using the indirect method. (Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response.)

Wickersham Brothers Inc. is developing its annual financial statements at December 31, 2011. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized.

Explanation / Answer

Hi,

Please find the answer as follows:

Cash flows from operating activities Amount Net Income 25000 Adjustments
Depreciation Expense 15000 Increase in Accounts Receivables -10000 Decrease in Inventory 5000 Decrease in Accounts Payables -2000 Increase in Wages Payable 1000 Net Cash from operating activities 34000

Cash flows from investing activities
Addition to Property Plant and Equipment -50000 Net Cash used by investing Activities -50000

Cash flows from financing activities
Repaid Principal on Long Term Debt -10000 Proceeds from Issuance of Stock 20000 Cash Paid for Dividends -16000 Net Cash used by financing activities -6000

Decrease in Cash and Cash Equivalents -22000 Cash and Cash Equivalent, Jan 1 72000 Cash and Cash Equivalent, 31 Dec 50000

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