Hunter Company is developing its annual financial statements at December 31, 201

Question

Hunter Company is developing its annual financial statements at December 31, 2015. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Balance Sheet at December 31 Cash Accounts Receivable S19,500 32,000 9,000 105,000 Accumulated Depreciation-Equipment (37,800) (31,500) S 47,870 29,700 32,700 114,300 S186,770 S164,000 Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Eanings S 26,800 770 41,000 84,500 33,700 S23,500 1,000 51,000 63,000 25,500 S186,770 S164,000 Income Statement for 2015 103,000 Sales Revenue Cost of Goods Sold Other Expenses 62,500 28,200 Net Income S 12,300 Additional Data: a. Bought equipment for cash, 59,300. b. Paid S10,000 on the long-term note payable. C. Issued new shares of stock for $21.500 cash. d. Declared and paid a 54,100 cash dividend e. Other expenses included depreciation, $6,300; salaries and wages, S10,300; taxes, $3,300; utilities, 58,300 f. Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.

Explanation / Answer

Hunter Company Statement of Cash Flows for the year ended December 31,2015 Cash flows from Operating Activities Net income for the year 12,300 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense 6,300 Decrease in Accounts receivable 2300 Decrease in inventory 6300 increase in accounts payable 3300 Decrease in Salaries and wages payable -230 17,970 Net cash flow from operating activities 30,270 Cash flows from Investing Activities: Cash paid form purchase of Equipment -9,300 Net cash used by investing activities -9,300 Cash flows from financing activities cash paid on the long term note payable -10,000 cash from common stock issue 21,500 Cash dividend paid -4,100 net cash flow from financing activities 7,400 Net increase in cash 28,370 cash at the beginning of the year 19,500 cash at year end 47,870

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