please answer PA12-3 Preparing a Statement of Cash Flows (Indirect Method) LO 12

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PA12-3 Preparing a Statement of Cash Flows (Indirect Method) LO 12-2, 12-3, 12-4, 12-5 XS Supply Company is developing its annual financial statomerts at December 31, 2013 The statements are complete except for the statement of cash fows. The compioted comparalive balance sheets and ncome statement are summarized Balance Sheet at Decamber 31 Cash Accounts Rec eivable Menchandise Ifrventory Property and Equipment Less: Accumulated Depreciation $ 34,960 35,800 41,800 127,000 30000 28 400 38,400 130,800) 104,000 (25,400 $200,760 $175,400 Accounts Payable Wages Payable Note Payabie, Long-Tem Contribined Capital Retained Eaminga 36800 27 400 1.600 1 360 91,000 3 000 38,00025,400 5208,0$175 400 Income Statemere tor 2013 Saies Cost of Goods Sold Other Expenses $124 000 a9 400 $ 12.600 Net Income

Explanation / Answer

Cash Flow Statement Amount $ Cash from the Operating Activities: Net Income 12600 + Depreciation 5400 - increase in accounts receivable (35800 - 28400) (7400) - increase in inventory (41800 - 38400) (3400) + increase in accounts payable (36800 -27400) 9400 - decrease in wages payable (1600 - 1360) (240) net cash from the operating activities= (16360) Cash from the Investing Activities: Purchase of Equipment (23000) net cash outflow from the investing activities= (23000) Cash from the Financing Activities: Payment to Long term loan (6400) Issued shares 18000 net cash inflow from the financing activities= 11600 Total cash inflow from the overall activities= 4960 Opening balance of cash and cash equivalents 30000 Closing balance of cash and cash equivalents $34960

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