the preceding IO Use method. 12-6A. Statement of Cash Flows (Indirect Method) Us

Question

the preceding IO Use method. 12-6A. Statement of Cash Flows (Indirect Method) Use the following information regarding the castle Corporation to prepare a statement of cash flows using the indirect methoo: the New. $ 3,000 7,000 Accounts payable decrease. 16,000 31,000 9,000 Cash paid as dividends Cash paid to retire bonds payable at par............ Cash received from issuance of common stock Cash received from sale of equipment . 69,000 45,000 . . . . . . . . . . . . . . . . . . . . .. . . . . . . . .. . . .. . .. . . 11,000 4,000 94,000 Inventory increase Net income. Prepaid expenses increase . 8,000

Explanation / Answer

statement of cash flow :

Cash flow from operating activities Net income 94000 Adjustment to reconcile net income Account payable decrease (3000) Account receivable increase (7000) Wages payable decrease (9000) Amortization expenses 16000 Depreciation expenses 39000 gain on sale of equipment (14000) Inventory increase (11000) Prepaid expenses increase (8000) Net cash flow from operating activities 97000 Cash flow from investing activities Purrchase land (100000) Sale of equipment 11000 Net cash flow from investing activities (89000) Cash flow from financing activities dividend paid (6000) Retire bonds payable (69000) Issue common stock 45000 Net Cash flow from financing activities (30000) Net cash flow (22000) Beginning cash 31000 ending cash 9000

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