are statement of cash flows (indirect method) using balance sheet Following are
ID: 2608031 • Letter: A
Question
are statement of cash flows (indirect method) using balance sheet Following are comparative balance sheets for Millco, Inc., at January 31 and Lo 1 Prep February 28, 2017: MILLCO, INC Balance Sheets February 28 and January 31, 2017 February 28 January 31 Assets Cash. $126.000 $111,000 159,000 282,000 ....$561,000 $552,000 Plant and equipment: Production equipment... 456,000 (63,000) $945,000 498,000 ....(T2,000) Total assets. . . Liabilities Accounts payable. Short-term debt . $987,000 $111,000 $123,000 132,000 72,000 $306,000 $327,000 138,000 $405,000 $465,000 ...132,000 63,000 99,000 Stockholders' Equity Common stock, no par value, 80,000 shares authorized, 60,000 and 56,000 shares issued, respectively Retained earnings: $312.000 $288.000 nnin $192,000 $129,000 87,000 (24,000) 108,000 (30,000) $270,000 $192,000 $582,000 $480,000 $987,000 $45,000 Ending balance .. Total stockholders' equityExplanation / Answer
Statement of cash flows (Indirect method)
for the month ended 28th Feb,2017
Cash flow from operating activity
Net income 108000
Add: Depreciation [72000-63000] 9000
117000
Increase in Accounts receivables (33000)
decrease in merchandise inventory 39000
decrease in accounts payable (12000)
decrease in other accrued liabilities (9000)
Net Cash provided by operating activity 102000
Cash flow from investing activity
purchase of production equipment (42000)
Net Cash used by investing activity (42000)
Cash flow from financing activity
proceed from common stock 24000
Payment of long term debt (39000)
Dividend paid (30000)
Net Cash used by financing activity (45000)
Net increase in cash 15000
Add: Cash in beginning 111000
Cash at end $126000
Purpose of cash flow statement : Cash flow statement provides information of total cash inflow and total cash outflow related to operating, investing and financing activities of a company during a particular period.
accomplishment of cash flow purpose : Cash flow statement purpose is accomplished when the total cash is inflowing into a company faster than its total cash outflow,that means company is generating more cash than paying.
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