The following information is available for Ramos Corporation for the year ended

Question

The following information is available for Ramos Corporation for the year ended December 31, 2014.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

RAMOS CORPORATION
Statement of Cash Flows—Indirect Method
For the Year Ended December 31, 2014

Beginning cash balance $ 108,990 Accounts payable decrease 8,961 Depreciation expense 392,364 Accounts receivable increase 19,860 Inventory increase 26,642 Net income 688,090 Cash received for sale of land at book value 84,770 Cash dividends paid 29,064 Income taxes payable increase 11,383 Cash used to purchase building 699,958 Cash used to purchase treasury stock 62,972 Cash received from issuing bonds 484,400

Explanation / Answer

Solution:

Ramos Corporation Statement of Cash Flows - Indirect Method For the year Ended on December 31,2014 Cash flow from operatig activities Net income 688,090 Add: Depreciation Expense 392,364 Less: Decrease in Accounts Payable -8,961 Less: Increase in accounts receivable -19,860 Less: Inventory increase -26,642 Add: Increase inincome taxes payable 11,383 Cash flow from operatig activities 1,036,374 Cashflow from investing activities Sale of Land 84,770 Purchase of Building -699,958 Cashflow from investing activities -615,188 Cashflow from Financing activities Cash dividends paid -29,064 Purchase of Treasury stock -62,972 Issue of Bonds 484,400 Cashflow from Financing activities 392,364 Changes in cash 813,550 Add: Beginninng cash balance 108,900 Ending Cash balance 922,450

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