Problem 2 Statement of cash flows. The information shown below is taken from the

Question

Problem 2 Statement of cash flows. The information shown below is taken from the accounts of Waverly Corporation for the year ended December 31, 2017 Net income Amortization of patent Proceeds from issuance of common stock Decrease in inventory Sale of building at a $15,000 gain Decrease in accounts payable Purchase of equipment Payment of cash dividends Depreciation expense Decrease in accounts receivable Payment of mortgage Increase in short-term notes payable Sale of land at a $5,000 loss Purchase of delivery van Cash at beginning of year $314,000 12,000 103,000 27,000 85,000 15,000 185,000 24,000 55,000 23,000 75,000 8,000 40,000 33,000 205,000 Instructions Prepare a statement of cash flows for Robinson corporation for the year ended December 31, 2017.

Explanation / Answer

Statement of cash flow :

Cash flow from operating activities Net income 314000 Adjustment to reconcile net income Depreciation expense 55000 Amortization of patent 12000 Decrease inventory 27000 Decrease account payable -15000 Decrease account receivable 23000 Increase short term note payable 8000 Net cash flow from operating activities 424000 Cash flow from investing activities Sale of building 85000 Purchase equipment -185000 Sale of land 40000 Purchase of delivery van -33000 Net cash flow from investing activities -93000 Cash flow from financing activities Issue common stock 103000 Payment of cash dividend -24000 Payment of mortgage -75000 Net cash flow from financing activities 4000 Net cash flow 335000 Beginning cash 205000 Ending cash 540000

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