Intermediate Account Statement of cash flow Use the data below to create a State

Question

Intermediate Account

Statement of cash flow

Use the data below to create a Statement of Cash Flows using the direct method

Wizard Company had avaliable at the end of 2015 the information shown below:

$20,000

Income Statement and Divident Information for the Year Ended December 31, 2015:

Comparative Balances Sheets 2015 2016 Cash

$20,000

$12,000 Short-term investments 31,500 40,000 Inventory 95,600 90,000 Prepaid expenses 15,600 26,000 Land 200,000 260,000 Buildings 650,000 650,000 Accumulated depreciation-buildings (75,000) (57,000) Equipment 346,000 150,000 Accumulated depreciation-equipment (41,000) (60,000) Patents 68,000 72,000 TOTAL ASSETS $1,310,700 $1,183,000

Explanation / Answer

NOTE: Some information is missing with regard to equipment and its accumulated depreciation. Please not that the accumulated depreciation has decreased from 60000 to 41000.

Also, the depreciation/amortization expense in the income statement also does not agree with the differences in the balances in the accumulated depreciation of buildings and equipments and balance in the patent account.

The difference is 60000 which is added along with equipment purchased during the year.

STATEMENT OF CASH FLOWS Cash flow from operating activities: cash sales 1560000 dividend received 4100 cash provided by operating activities 1564100 cash paid to suppliers 987500 cash paid for expenses 274500 interest paid 90500 income taxes paid 56700 cash paid for operating activities 1409200 Net cash flow provided by operating activities 154900 Cash flow from investing activities: sale of land 81000 sale of investment 500 equipment purchased -256000 Net cash used by investing activities -174500 Cash flow from financing activities: redemption of long term nores -25000 cash dividends paid -40000 common stock issued 92600 Net cash flow provided by financing activities 27600 Net increase in cash and cash equivalents 8000 Cash & cash equivalents at the beginning of the year 12000 Cash & cash equivalents at the end of the year 20000

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