Exercise 12-5 The following information is available for Ivanhoe Company for the

Question

Exercise 12-5 The following information is available for Ivanhoe Company for the year ended December 31, 2017 Beginning cash balance Accounts payable decrease Depreciation expense Accounts receivable increase Inventory increase Net income Cash received for sale of land at book value Cash dividends paid Income taxes payable increase Cash used to purchase building Cash used to purchase treasury stock Cash received from issuing bonds 49,635 4,081 178,686 9,045 12,133 313,362 38,605 13,236 5,184 318,767 28,678 220,600 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). Ivanhoe Company Statement of Cash irect Method Adjustments to reconcile net income to

Explanation / Answer

Ivanhoe Company Statement of cash flows - Indirect method Cash flow from operting activities Net income $3,13,362 Adjustments to reconcile net income Increase in accounts receivables -$9,045 Increase in inventory -$12,133 Decrease in accounts payable -$4,081 income taxes payable increase $5,184 Depreciation $1,78,686 total Adjustments $1,58,611 Net cash flow from operating activities $4,71,973 Cash flow from investing activites cash received from sale of land $38,605 cash used to purchase building -$3,18,767 Net cash flow from investing activities -$2,80,162 Cash flow from financing activites cash dividends paid -$13,236 cash used to purchase treasury stock -$28,678 cash received from issuing bonds $2,20,600 Net cash flow from financing activities $1,78,686 Net cash flow $3,70,497 Opening cash balance $49,635 Closing cash balance $4,20,132

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