prepare a cash statement of flows for 2002 erating activities for the year. Use

ID: 2433754 • Letter: P

Question

prepare a cash statement of flows for 2002 erating activities for the year. Use the following column nedi Item Amount Add 13-7 Prepare a Statement of Cash Flows (Indirect Method) (LO2, LO3) ive financial statement data for Holly Company are given below December 31 2002 2001 Cash Accounts receivable Inventory Plant and equipment.. 36 75 210 29 61 180 (40)(30) Total assets $285 $247 Common stock Retained earnings Total liabilities and stockholders' equity....$2 $ 39 70 138 90 150 $247 For 2002, the company reported net income as follows: Sales Less cost of goods sold300 Gross margin Less operating expenses.180 $500 200 Dividends of $8 were declared and paid during 2002. There were no sales of plant and equipment during the year Required: Using the indirect method, prepare a statement of cash flows for 2002. EXERCISE 1-8 (Appendix 134) Net Cash Provided by Operating Activities (Direct Method

Explanation / Answer

Cash Flow Statement (Indirect Method):-

Cash Flow from Operating Activities:-

Net Income

Adjustment to Reconcile Net Income to Cash Basis:-

Depreciation

Increase A/c Receivable

-7

Increase Inventory

-14

Increase A/c Payable

Cash Flow from Operating Activities (A)

Cash Flow from Investing Activities:-

Plant & Equipment

-30

Cash Flow from Investing Activities (B)

-30

Cash Flow from Financing Activities:-

Issue Common stock

Paid Dividend

-8

Cash Flow from Financing Activities (C)

Net Cash Flow (A+B+C)

-3

Beginning Cash Flow

Ending Cash Flow