Additional information: A cash dividend of €35,780 was declared and paid during

Question

Additional information:

A cash dividend of €35,780 was declared and paid during the year.

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).)

1. New equipment costing €80,920 was purchased for cash during the year. 2. Old equipment having an original cost of €58,250 and accumulated depreciation of 51,000 was sold for €12,600 cash. 3. Bonds payable matured and were paid off at face value for cash. 4.

A cash dividend of €35,780 was declared and paid during the year.

Explanation / Answer

Cash flows from operating activities net income 171690 Adjustments to reconcile net income to net cash provided by operating activities decrease in accured expenses payable -1420 increase in inventory -9770 increase in accounts receivable -58790 Depreciation expense 47,290 Gain on disposal of plant assets -5350 increase in prepaid expense -4210 increase in accounts payable 44080 11,830 Net cash provided by operating activities 183520 Cash flows from investing activities purchase of Equipment -80,920 sale of Equipment 12600 purchase of long term investment -25920 net cash used by investing activities -94240 Cash flows from financing activities Redemption of bonds -29350 cash from stock issue 45610 cash dividend -35780 net cash used by financing activities -19520 Net increase in cash 69760 Cash at beginning of period 47040 cash at year end 116800

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