please explain how you found your answer Statement of Cash Flows (Indirect Metho

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please explain how you found your answer

Statement of Cash Flows (Indirect Method) The Rainbow Company's income statement and comparative balance sheets as of 31 of 2016 and 2015 follow: Finish attempt... COMPANY Managerial unting Concepts and $750,000 19,000 769,000 Dividend Income : Cost Accounting ems: job Order Cost of Goods Sold Wages and Other Operating Expenses Depreciation Expense $440,000 130,000 4: Cost Accounting tems: Process Costing 7,000 Interest Expense sting Loss on Sale of E 5,000 (10,000) 668,000 $101,000 h 7: Variable Costing: A h 8: Relevant Costs and Making Ch 9: Planning and m Decision Balance Sheets Dec. 31, 2016 Dec. 31, 2015 $25,000 45,000 30,000 103,000 77,000 Budgeting Ch 10: Standard Costing and Variance Analysis Prepaid Expenses 50,000 Adjustment to i 100,000

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Solution:

Cash Flow from Operating Activities $ Net Income 101000 Add: Depriciation 39000 Patent amortization 7000 Loss on sale of Equipment 5000 Gain on sale of Investment -10000 Preapid Expences -4000 Inventory -26000 Account payable 4000 Account Receivable -15000 Interest payable 1000 Income tax Payable -4000 Cash Flow provided by Operating Activities -3000 Cash flow from Investing Activities Sale of Investment 60000 Purchase of Land -90000 Improvement to Building -95000 Sale of Equipment 14000 Cash used by Investing Activity -111000 Cash flow from Financing Activities Issuance of Common Stock 24000 Issuance of Bonds payable 40000 payment of Dividends -55000 Cash provided by Financing Activities 9000 Net Inflow -4000 Cash at Beginning of Year 29000 Cash at end of Year 25000

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