Burns Corporation\'s net income last year was $94,600. Changes in the company\'s

Question

Burns Corporation's net income last year was $94,600. Changes in the company's balance sheet accounts for the year appear below:

The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $4,300.

Required:

a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.)

b. Prepare the investing activities section of the company's statement of cash flows for the year.

c. Prepare the financing activities section of the company's statement of cash flows for the year.

Increases
(Decreases) Asset and Contra-Asset Accounts: Cash and cash equivalents $ 17,000 Accounts receivable $ 13,300 Inventory $ (16,600 ) Prepaid expenses $ 4,300 Long-term investments $ 10,300 Property, plant, and equipment $ 73,500 Accumulated depreciation $ 31,600 Liability and Equity Accounts: Accounts payable $ (18,400 ) Accrued liabilities $ 17,100 Income taxes payable $ 4,200 Bonds payable $ (64,200 ) Common stock $ 41,200 Retained earnings $ 90,300

Explanation / Answer

a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.)

b. Prepare the investing activities section of the company's statement of cash flows for the year.

c. Prepare the financing activities section of the company's statement of cash flows for the year.

Net income 94600 Adjustment to reconcile net income Depreciation expense 31600 Increase account receivable -13300 Decrease inventory 16600 Increase prepaid expense -4300 Decrease account payable -18400 Increase accured liabilities 17100 Increase income tax payable 4200 Net cash flow from operating activities 128100

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