The balance sheets for Kinder Company showed the following information. Addition

Question

The balance sheets for Kinder Company showed the following information. Additional information concerning transactions and events during 2015 are presented below.

2015

2014

$ 44,875

$ 12,750

47,875

25,375

43,750

52,500

0

18,750

295,625

$385,000

$265,625

$ 21,250

$ 33,125

26,250

21,250

87,500

62,500

162,500

112,500

87,500

36,250

$385,000

$265,625

Additional data:

Prepare a statement of cash flows (using the indirect method) for 2015 for Kinder Company. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Kinder Company
Statement of Cash Flows
For the Year Ended December 31, 2015
Increase (Decrease) in Cash

Kinder Company
Balance Sheet December 31

2015

2014

Cash

$ 44,875

$ 12,750

Accounts receivable (net)

47,875

25,375

Inventory

43,750

52,500

Long-term investments

0

18,750

Property, plant & equipment

295,625

187,500 Accumulated depreciation (47,125) (31,250)

$385,000

$265,625

Accounts payable

$ 21,250

$ 33,125

Accrued liabilities

26,250

21,250

Long-term notes payable

87,500

62,500

Common stock

162,500

112,500

Retained earnings

87,500

36,250

$385,000

$265,625

Explanation / Answer

Notes:

1) Purchase of machinery = 295625 - 75000 - 26875-187500 = $6250

Kinder company Statement of Cash Flows—Indirect Method For the year ended on December 31, 2015 ($ in thousands) Cash Flow from Operating Activities $ $ $ Net Income 88750 Adjustments for Depreciation 15875 Accrued Liabilities (26250-21250) 5000 Inventory (52500-43750) 8750 Gain on sale of investments (35000-18750) -16250 Accounts receivable (47875-25375) -22500 Accounts payable (33125-21250) -11875 -21000 Cash Flow from Operating Activities 67750 Cash Flow from Investing Activities Sale of long term investments 35000 Purchase of machinery (26875 + 6250) -33125 Net Cash Folw from Investing Activities 1875 Cash Flow from financing Activities Dividend Paid -37500 Net Cash Flow from Financing Activities -37500 Net Cash Flow during the year 32125 Add: Cash balance as on January 1, 2015 12750 Cash Balance as on December 31, 2015 44875

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