Using the indirect method, prepare a statement of cash flows for the year. (List

Question

Using the indirect method, prepare a statement of cash flows for the year. (List any deduction in cash and cash outflows as negative amounts.)

Explanation / Answer

Cash flows from operating activities Before konwing Net Income After Knowing Net Income Net income                  -   94400 Adjustments for: Net cash provided from operating activities Depreciation (1050200-(984900-125800)) 191100 191100 Gain on sale of Equipment(35700-(160000-125800)) -1500 -1500 Increase in accounts receivables -170600 -170600 Decrease in inventories       63,900.00                                       63,900.00 Increase in Prepaid expenses      (4,200.00)                                       (4,200.00) Increase in Accounts Payable       48,400.00                                       48,400.00 Decrease in Accured payable      (5,000.00)                                       (5,000.00) Net cash from operating activities     122,100.00                                     216,500.00 Cash flows from investing activities Purchase of Equipment (3198000-(2950000-160000)) -408000 -408000 Sale of Equipment       35,700.00                                       35,700.00 Increase in Long term Investment     (95,000.00)                                     (95,000.00) Decrease in Long term Investment       81,000.00                                       81,000.00 Net cash used in investing activities (386,300.00)                                   (386,300.00) Cash flows from financing activities Issue of Common Stock     126,000.00                                     126,000.00 Borrowings in Bonds payable     204,000.00                                     204,000.00 Payment of Dividend       (10,300.00)                                     (10,300.00) Net cash used in financing activities     319,700.00                                     319,700.00 Net increase in cash and cash equivalents     55,500.00                                   149,900.00 Cash at beginning 109,600.00                                                  109,600.00 Cash and cash equivalents at end of period For Assets Debit>Credit=Increase in asset Credit>Debit=Decrease in assets Foe Liabilities Debit>Credit=Decrease in Liabilities Credit>Debit=Increase in Liabilities Ans a Increase in Cash 149900 After all other adjustment increase in cash 55500 Net Income 94400 Ans e Net increase in cash and cash equivalents       149,900.00 Cash at beginning       109,600.00 Cash and cash equivalents at end of period       259,500.00

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