The following information is available for Ramos Corporation for the year ended

Question

The following information is available for Ramos Corporation for the year ended December 31, 2014.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Beginning cash balance $ 85,905 Accounts payable decrease 7,063 Depreciation expense 309,258 Accounts receivable increase 15,654 Inventory increase 20,999 Net income 542,347 Cash received for sale of land at book value 66,815 Cash dividends paid 22,908 Income taxes payable increase 8,972 Cash used to purchase building 551,701 Cash used to purchase treasury stock 49,634 Cash received from issuing bonds 381,800 The following information is available for Ramos Corporation for the year ended December 31, 2014.

Explanation / Answer

Cash flows from operating activities
Net income: $284,100
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense: $187,000
Increase in income tax payable: $4,700
Increase in inventory: ($11,000)
Increase in accounts receivable: ($8,200)
Decrease in accounts payable: ($3,700)
Net cash provided by operating activities: $452,900

Cash flows from investing activities
Cash received for sale of land 35,000
Cash used to purchase building (129,000)

Net cash provided by financing activities
Cash received from issuing bonds 200,000
Cash dividends paid (12,000)
Cash used to purchase treasury stock (32,000)

Net increase in cash: $514,900
Cash at beginning of period: $45,000
Cash at end of period: $559,900

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