The three accounts shown below appear in the general ledger of Lauber Corp. duri

Question

The three accounts shown below appear in the general ledger of Lauber Corp. during 2014. Equipment Date Debit Credit Balance Jan. 1 Balance 488,640 July 31 Purchase of equipment 213,780 702,420 Sept. 2 Cost of equipment constructed 161,862 864,282 Nov.10 Cost of equipment sold 149,646 714,636 Accumulated Depreciation-Equipment Date Debit Credit Balance Jan. 1 Balance 216,834 Nov.10 Accumulated Depreciation on Equipment sold 48,864 167,970 Dec. 31 Depreciation for year 85,512 253,482 Retained Earnings Date Debit Credit Balance Jan. Balance 320,670 Aug. Dividends (cash) 42,756 277,914 Dec. 31 Net income 219,888 497,802 From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of plant assets was $24,432. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Explanation / Answer

Statement of Cash Flow Cash Flow from Operating Activities Net Income 219888 (+)Depreciation for the year 85512 Net cash income 305400 Total Cash Flow from Operating Activities 305400 Cash Flow from Investing Activities Purchase of Equipment -213780 Cost of equipment constructed -161862 Equipment Sold 76350 Total Cash flow from Investing Activities -299292 Cash Flow from Financing Activities Dividend paid -42756 Total Cash flow from Financing Activities -42756 Total Cash Flow -36648

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