Broadening Your Perspective 17-4 - Google Chrome ? Secure ! https://edugen.wiley

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Broadening Your Perspective 17-4 - Google Chrome ? Secure ! https://edugen.wileyplus.com/edugen/shared/assignment/test/qprint.uni GUTHRIE COMPANY Statement of Cash Flows For the Year Ended January 31, 2017 Sources of cash From sales of merchandise From sale of capital stock From sale of investment (purchased below) From depreciation From issuance of note for truck From interest on investments $342,000 378,000 72,000 50,000 18,000 5,000 865,000 Total sources of cash Uses of cash For purchase of fixtures and equipment For merchandise purchased for resale For operating expenses (including depreciation For purchase of investment For purchase of truck by issuance of note For purchase of treasury stock For interest on note payable 297,000 232,000 144,000 68,000 18,000 9,000 3,000 771,000 $94,000 Total uses of cash Net increase in cash Tom claims that Guthrie's statement of cash flows is an excellent portrayal of a superb first year with cash increasing $94,000. Mary replies that it was not a superb first year. Rather, she says, the year was an operating failure, that the statement is presented incorrectly, and that $94,000 is not the actual increase in cash. The cash balance at the beginning of the year was $126,000. Answer the following. Using the data provided, prepare a statement of cash flows in proper form using the indirect method. The only noncash items in the income statement are depreciation and the gain from the sale of the investment. (Show amounts that decrease cash flow with either a sign e.g. -15,000 or in parenthesis e.g. (15,000).) GUTHRIE COMPANY Statement of Cash Flows 9:08 AM

Explanation / Answer

non cash investing and financing activity :

For purchase of truck by,issuance of note :18000

cash flow from operating activity Net Loss (28000) adjustment to reconcile net income depreciation 50000 gain on sale of investment (4000) 46000 Net cash provided by operating activity 18000

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