The following information is available for Indigo Corporation for the year ended
ID: 2432575 • Letter: T
Question
The following information is available for Indigo Corporation for the year ended December 31, 2017 Beginning cash balance Accounts payable decrease Depreciation expense Accounts receivable increase Inventory increase Net income Cash received for sale of land at book value Cash dividends paid Income taxes payable increase Cash used to purchase building Cash used to purchase treasury stock Cash received from issuing bonds 48,600 3,996 174,960 8,856 11,880 306,828 37,800 12,960 5,076 312,120 28,080 216,000 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).) Indigo Corporation Statement of Cash Flows-Indirect Method For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net Income 306,828 Adjustments to reconcile net income to Net Cash Provided by Operating Activities $ Depreciation Expense 174,960 Increase in Accounts Receivable 8,856 Increase in Inventory 11,880Explanation / Answer
Cash flow statement $ $ 1 Cash from operating activities; Net income 306,828 Add; Depreciation expenses 174,960 Income tax payable increases 5,076 Deduct; Accounts payable decrease (3,996) Accounts receivable increases (8,856) inventory increases (11,880) Net cash flow 155,304 2 Cash from investing activities; Cash received for a sale of land at book value 37,800 Cash used to purchase of building (312,120) Net cash flow (274,320) 3 Cash from financing activites; Cash dividend paid (12,960) Cash used to purchase tresury stock (28,080) Cash received from issuing bond 216,000 Net cash flow 174,960 Add: Beginning balance of cash 48,600 Ending balance of cash 411,372
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