Use the following data for Jenkins Co. to prepare a statement of cash flows usin

Question

Use the following data for Jenkins Co. to prepare a statement of cash flows using the indirect method for the year ended June 30, 20x6.

Jenkins Co.

Income Statement

For the Year Ended June 30, 20x6

$700,000

$400,000

40,000

104,000

70,000

         1,000

615,000

$ 85,000

   20,000

$ 65,000

Jenkins Co.

Comparative Balance Sheets

June 30, 20x6 and 20x5

Assets

20x6

20x5

$ 9,000

$ 30,000

70,000

55,000

80,000

100,000

6,000

5,000

40,000

50,000

160,000

80,000

(40,000)

(24,000)

$325,000

$296,000

Liabilities

$   4,000

$    12,000

440

520

1,560

1,480

   40,000

   24,000

$ 46,000

$ 38,000

Stockholders' Equity

$ 116,000

$ 130,000

163,000

128,000

$279,000

$258,000

$325,000

$296,000

Additional information:

Jenkins Co.
Statement of Cash Flows
For the Year Ended June 30, 20x6

Jenkins Co.

Income Statement

For the Year Ended June 30, 20x6

Sales

$700,000

Less expenses Cost of goods sold

$400,000

Depreciation expense

40,000

Administrative expenses

104,000

Selling expenses

70,000

Loss on sale of investment

         1,000

615,000

Income before income taxes

$ 85,000

Income taxes expense

   20,000

Net income

$ 65,000

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Opening cash and cash equivalents             30,000.00 Income                65,000.00 Loss on sale of invt                  1,000.00 Depreciation                40,000.00 Income Tax Expense                20,000.00 Increase in AR             (15,000.00) Decrease in inventory                20,000.00 Increase in Prepaid Ins                (1,000.00) Decresae in AP                (8,000.00) Decrease in Wages Payable                      (80.00) Income Tax Paid = 20,000-80             (19,920.00) Cash flow from operating activities           102,000.00 Cash flow from Investing activities Sale of invt                  9,000.00 Purchase of PPE           (120,000.00) Sale of PPE                16,000.00 Cash flow from Investing activities           (95,000.00) Cash flow from Financing activities Purchase of Stock             (14,000.00) Issue of Notes                16,000.00 Dividends Paid(65000-163,000+128,000)             (30,000.00) Cash flow from Financing activities           (28,000.00) Closing cash and cash equivalents                9,000.00

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