The following is a list of items for Pitts Company\'s 2016 statement of cash flo

Question

The following is a list of items for Pitts Company's 2016 statement of cash flows: 1.proceeds from sale of equipment, $2,400 2.increase in inventory, $3,100 3.net income, $12,000 4.payment for purchase of building, $39,000 5.depreciation expense, $7,700 6.receipt from issuance of bonds, $20,000 7.increase in prepaid expenses, $600 8.loss on sale of equipment, $2,100 9.payment of dividends, $5,000 10.decrease in accounts receivable, $1,500 11.issuance of common stock for land, $7,000 12.decrease in accounts payable, $1,500 13.beginning cash balance, $10,000 Required: 1.Prepare the statement of cash flows.

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Net Income                12,000.00 Loss on sale of equipment                  2,100.00 Depreciation                  7,700.00 Decrease in AR                  1,500.00 Increase in inventory                (3,100.00) Increase in prepaid expenses                   (600.00) Decrease in AP                (1,500.00) Cash flow from operating activities             18,100.00 Cash flow from Investing activities Proceeds from sale of equipment                  2,400.00 Payment for purchase of building             (39,000.00) Cash flow from Investing activities           (36,600.00) Cash flow from Financing activities Receipt from issuance of Bonds                20,000.00 Dividends Paid                (5,000.00) Cash flow from Financing activities             15,000.00 Opening cash and cash equivalents             10,000.00 Closing cash and cash equivalents                6,500.00

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