has prepared the following comparative balance sheet for 11, 2012 2012 2011 $198

Question

has prepared the following comparative balance sheet for 11, 2012 2012 2011 $198,000 $102,000 Receivable 78,000 106,000 100,000 12,000 840,000- (300,000) - 120,000 18,000 700,000 (250,000) 116.000 Plant assets Accumulated depreciation Goodwill Total Assets Account Payable $102,000 40,000 $112,000 Accrued Liabilities 28,000 Ponds Payable Preferred stocks Common stocks Retrained earnings 300,000 400,000 $884,000 430,000 400,000 Total Liabilities & equity $1.058,000 1- The Accumulated Depreciation account has been credited only for the depreciation expense for the period. Goodwill was tested for impairment during the year 2. The Retained Earnings account has been charged for dividends of $ 92,000 and credited for the net income for the year. The income statement for 2012, is as follows: Sales Cost of sales Gross profit Operating expenses Net income $1,320,000 726,000 594,000 460,000 nstructions: se the information above to prepare statement of cash flows according to the rect method for Dillard's Corporation, for the year ended December 31, 2012. how Computations)

Explanation / Answer

Cash Flow Statement :

Cash from the operating activities: Net Income $134000 add - depreciation (300000 - 250000) + 50000 less - increase in receivables - 28000 add - decrease in inventories +20000 add - decrease in pre-paid expenses +6000 less - decrease in payables -10000 add - increase in Accured liabilities +12000 Net cash inflow of the operating activities $184000 Cash flow of the Investing Activities: less - increase in plant assets - 140000 add - decrease in Goodwill + 14000 Net cash outflow of the Investing activities -126000 Cash flow of the Financing Activities : less - bond repayment -300000 add - preferred stock issued +430000 less - dividend paid -92000 Net Cash inflow of the financing activities +38000 Net cash flow of all the activities +96000 Add: opening cash balance 102000 Closing cash balance 198000

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