Audio City, Inc. is developing its annual financial statements at December 31. T
ID: 2530969 • Letter: A
Question
Audio City, Inc. is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized below:
Accounts Payable includes only inventory purchases made on credit. Because a liability relating to taxes does not exist, assume that they were fully paid in cash.
1)
Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
Audio City, Inc. is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized below:
Explanation / Answer
Answer:-
Audio City Inc. Statement of Cash Flow (Using Indirect Method) For the year ended Particulars Amount $ Cash flow from opreating activities Net Income 52500 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Depreciation 17500 Change in opreating assets & liabilities Decrease in accounts receivable 5500 Increase in inventory -2500 Decrease in accounts payable -11500 Increase in salaries and wages payable 1200 Net cash flow from opreating activities (a) 62700 Cash Flow from Financing activities Cash dividends paid -5500 Common stock issued 35000 Net cash Flow from Financing activities (b) 29500 Cash Flow from Investing activities Equipment purchased -78000 Long term note paid -17500 Net cash Flow from Investing activities (c) -95500 Net Channge in cash c=a+b+c -3300 Beginning cash balance 76000 Closing cash balance 72700Related Questions
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