Question

Windsor, Inc. Comparative Balance Sheets December 31
Assets		2022			2021			Change Increase/Decrease
Cash		$100,300			$61,200			$39,100	Increase
Accounts receivable		105,400			37,400			68,000	Increase
Inventory		74,800			–0–			74,800	Increase
Prepaid expenses		10,200			6,800			3,400	Increase
Land		93,500			119,000			25,500	Decrease
Buildings		340,000			340,000			–0–
Accumulated depreciation—buildings		(35,700	)		(23,800	)		11,900	Increase
Equipment		311,100			115,600			195,500	Increase
Accumulated depreciation—equipment		(47,600	)		(17,000	)		30,600	Increase
Totals		$952,000			$639,200
Liabilities and Stockholders’ Equity
Accounts payable		$73,100			$68,000			$5,100	Increase
Accrued expenses payable		0			17,000			17,000	Decrease
Bonds payable		170,000			255,000			85,000	Decrease
Common stock ($1 par)		391,000			102,000			289,000	Increase
Retained earnings		317,900			197,200			120,700	Increase
Totals		$952,000			$639,200

Windsor, Inc. Income Statement For the Year Ended December 31, 2022
Sales revenue				$1,599,700
Cost of goods sold		$807,500
Operating expenses		392,700
Interest expense		20,400
Loss on disposal of equipment		3,400		1,224,000
Income before income taxes				375,700
Income tax expense				110,500
Net income				$265,200

Additional information:
1.		Operating expenses include depreciation expense of $68,000.
2.		Land was sold at its book value for cash.
3.		Cash dividends of $144,500 were declared and paid in 2022.
4.		Equipment with a cost of $282,200 was purchased for cash. Equipment with a cost of $86,700 and a book value of $61,200 was sold for $57,800 cash.
5.		Bonds of $85,000 were redeemed at their face value for cash.
6.		Common stock ($1 par) of $289,000 was issued for cash.

Use this information to 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

Statement of Cash Flows
For the Year Ended December 31, 2022
Cash Flows from Operating Activities:
Net income		265200
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	68000
Loss on disposal of equipment	3400
Increase in Accounts Receivable	-68000
Increase in Inventory	-74800
Increase in Prepaid expenses	-3400
Increase in Accounts payable	5100
Decrease in Accrued expenses payable	-17000
		-86700
Net cash provided by operating activities		178500
Cash Flows from Investing Activities:
Sale of Land	25500
Purchase of Equipment	-282200
Sale of Equipment	57800
Net Cash Provided by Investing Activities		-198900
Cash Flows from Financing Activities
Payment of Cash Dividends	-144500
Redemption of Bonds Payable	-85000
Issuance of Common Stock	289000
Net Cash Used by Financing Activities		59500
Net Increase in Cash		39100
Cash at Beginning of Period		61200
Cash at End of Period		100300