Statement of Cash Flows-Indirect Method The comparative balance sheet of Tru-Bui

Question

Statement of Cash Flows-Indirect Method The comparative balance sheet of Tru-Built Construction Inc. for December 31, 2016 and 2015, is as follows: Dec. 31, 2016 Dec. 31, 2015 Assets Cash Accounts receivable (net) Inventories Land Equipment Accumulated depreciation-equipment $37 47 26 104 41 $117 95 53 $359 $248 Total Assets Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Dividends payable Common stock, $10 par Paid-in capital: Excess of issue price over par common stock Retained earnings $45 $37 12 60 29 223 170 Total liabilities and stockholders' equity $359 $248

Explanation / Answer

Ans:-

Tru- buiit Construction Inc. Statement of Cash Flows For the Year Ended Dec 31 2016 Cash Flows from Operating Activities Amount Net Income 77 Adjustment to reconcile net income with Operating Activities:- Depreciation 7 Profit on sale of land -14 Changes in current operating assests and liabilities Increase in accounts receivable -19 Increase in Inventories -16 Increase in accounts payable 8 Increase in Dividend payable 7 Net cash Flow from operating Activities (A) 50 Cash Flows from Investing Activities Cash Received from Sale of land 23 Less:- Cash paid from purchase of equipment -12 Net cash Flow from investing Activities (B) 11 Cash Flows from financing Activities Cash Received from Sale of Common Stock 43 Dividend paid -24 Net cash Flow from financing Activities(C) 19 Increase in Cash (A+B+C) 80 cash at beginning of year 37 cash at end of year 117

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