chief accountant for Wildcat Inc. provide you with the company\'s most recent fi

Question

chief accountant for Wildcat Inc. provide you with the company's most recent financial statements and the following information: Equipment with a cost of $101 was purchased for cash. Old equipment with book value of $120 was sold. Common stock ($1 par) was issued for cash. Cash dividends were declared and paid. a) b) c) Cash flow statements sh Cash collected from customers $162 Cash paid to suppliers Cash paid for S&A; costs Cash paid for Income taxes 23 Net cash flow provided from operating activities $23 Income statement Sales revenue 180 (76) Costs of Goods sold Bad debts expense Depreciation Expense Selling and Administrative Expenses 24 12 Loss on the sale of equipment Income before taxes Income tax Expense Net Income 20 $16 12/31/07 12/31/06 Balance Sheet Cash Account Receivables Less: allowance for doubtful accounts 34 $192 24 160 (20) Inventory Property, Plant &Equipment; Less: accumulated Depreciation(80) $556 833 891 $50 $628 Account payable to suppliers Payables for Selling & Administration Income tax payable Common Stock $586 $18 26 181 Retained Earnings 176 a) Prepare the cash flow from operating activities using the indirect method. b) Prepare the investing and financing sections of the cash flow statement using the direct method. c) Calculate ending cash balance on 12/31/2007

Explanation / Answer

a) Cash Flow from Operating activities using Indirect Method:

b)Cash flow from Investing Activities:

Cash flow from Financing activities:

Income tax paid

C)Calculation of Ending Cash Balance on 31/12/2007:

Note:

Balance Sheet amounts updated as follows

Particulars Amount($) Net Income 16 Adjustments for Depreciation 24 Loss on sale of equipment 40 Increase in Accounts Receivable -14 Decrease in Inventory 27 Decrease in Accounts Payable -28 Decrease in Selling & Admin Payable -42 Cash flow from Operating activities 23

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