Statement of Cash Flows The following are several items involving the cash flow

Question

Statement of Cash Flows

The following are several items involving the cash flow activities of the ROCKY HORROR PICTURE CO. for 2016:

Net income, $43300

Payment of dividends, $15600

Ten-year, $36100 bonds payable were issued at face value

Depreciation expense, $20600

Building was acquired at a cost of $36400

Accounts receivable decreased by $1800

Accounts payable decreased by $4600

Equipment was acquired at a cost of $6600

Inventories increased by $6100

Beginning cash balance, $16500

Required:

Prepare Rocky Horror Picture's statement of cash flows for 2016 using the indirect method. Use a minus sign for any negative amounts.

ROCKY HORROR PICTURE CO. Statement of Cash Flows For Year Ended December 31, 2016 Net Cash Flow From Operating Activities $ Adjustments for differences between income flows and cash flows from operating activities: $ Cash Flows From Investing Activities $ Cash Flows From Financing Activities $ $ $

Explanation / Answer

Answer:-

Rocky Horror Picture's Statement of Cash Flow (Using Indirect Method) For the year ended December 31,2016 Particulars Amount $ Cash flow from opreating activities Net Income 43300 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Depreciation 20600 Change in opreating assets & liabilities Decrease in Accounts Receiviable 1800 Increase in Inventories -6100 Decrease in Accounts payable -4600 Net cash flow from opreating activities (a) 55000 Cash Flow from Financing activities Cash dividends paid -15600 Bonds Issued 36100 Net cash Flow from Financing activities (b) 20500 Cash Flow from Investing activities Purchase of Equipment -6600 Purchase of Building -36400 Net cash Flow from Investing activities (c) -43000 Net Channge in cash c=a+b+c 32500 Beginning cash balance 16500 Closing cash balance 49000

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