Question

The following information is available for Indigo Corporation for the year ended December 31, 2022.

Beginning cash balance		$ 40,800
Accounts payable increase		9,690
Depreciation expense		69,700
Accounts receivable decrease		8,160
Inventory decrease		5,270
Net income		97,240
Cash received for sale of land at book value		176,800
Cash dividends paid		64,600
Income taxes payable decrease		6,630
Cash used to purchase land		137,700
Cash used to redeem bonds		112,200
Cash received from issuing stock		272,000

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Answer-

INDIGO CORPORATION
STATEMENT OF CASH FLOWS PARTIAL (USING INDIRECT METHOD)
FOR THE YEAR ENDED DECEMBER 31,2022
Particulars		Amount
		$
Cash flow from operating activities
Net Income		97240
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation		69700
Change in operating assets & liabilities
Decrease in accounts receivable		8160
Decrease in inventory		5270
Increase in accounts payable		9690
Decrease in income taxes payable		-6630
Net cash flow from operating activities (a)		183430
Cash Flow from Investing activities
Land sold		176800
Land purchased		-137700
Net cash Flow from Investing activities (b)		39100
Cash Flow from Financing activities
Cash dividends paid		-64600
Bonds paid		-112200
Common stock issued		272000
Net cash Flow from Financing activities (c)		95200
Net Change in cash c=a+b+c		317730
Beginning cash balance		40800
Closing cash balance		358530