7-10 The consolidated balance sheets for Lkayd Lumber Company at the begining St

Question

7-10 The consolidated balance sheets for Lkayd Lumber Company at the begining Statement of Cash and end of 2015 follow. The company bought $50 million worth of fixed assets. The charge for depreciation in 2015 was $10 million. Net income was $33 mil lion, and the company paid out $5 milbon in dividends. a. Fill in the amount of the source or use in the appropriate column. Flows ayd Lumbar Company Balance Shaats at Baginning and End of 2015 $ milion) Chango a Doc. 31 SourcUsa Marketable securtties Net receivables Total curent assets Gruss fixed assets Less: Accunmulated depreciaion S 90 $ 123 5_ Net fisxed assets Total assets 5140 213 $18 1 Accounts payable Notes payable Cxher current babtlities Long-term debc Total Labtlities Common stock Retained earnings Total abtltles and equity $ 44 61 $5140 $213 b. Prepare a statement of cash flows C. Briefly summarice your findings.

Explanation / Answer

Cash flow indirect method Cash flow from operating activities Net income 33 Adjustments to reconcile the net income Depreciation expense 10 Changes in current asset and liabilities Increase in prepaid insurance decrease in accounts receivable 8 Increase in Inventory -22 decrease in accounts payable -3 Increase in notes payable 12 Decrease in other current liabilities -8 -3 Cash flow from operating activities 30 Cash flow from Investing activities Equipment purchased -50 Cash flow from Investing activities -50 Cash flow from Financing activities Common stock 28 Long term liabilities 16 Dividend paid -5 Cash flow from Financing activities 39 Net Cash and cash equivalent 19 Add Beginning cash and cash equivalent 7 Ending cash and cash equivalent 26 (15+11)

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