Question

Statement of Cash Flows (Indirect Method)

Use the following information regarding the Fremont Corporation to prepare a statement of cash flows using the indirect method:

Accounts payable increase	$14,000
Accounts receivable increase	7,000
Accrued liabilities decrease	5,000
Amortization expense	31,000
Cash balance, January 1	21,000
Cash balance, December 31	141,000
Cash paid as dividends	41,000
Cash paid to purchase land	81,000
Cash paid to retire bonds payable at par	70,000
Cash received from issuance of common stock	75,000
Cash received from sale of equipment	17,000
Depreciation expense	65,000
Gain on sale of equipment	12,000
Inventory decrease	11,000
Net income	126,000
Prepaid expenses increase	3,000

Remember to use negative signs with answers when appropriate.

FREMONT CORPORATION Statement of Cash Flows For Year Ended December 31
Cash Flow from Operating Activities
Net Income	Answer
Add (deduct) items to convert net income to cash basis
Depreciation	Answer
Amortization	Answer
Gain on Sale of Equipment	Answer
Accounts Receivable Increase	Answer
Inventory Decrease	Answer
Prepaid Expenses Increase	Answer
Accounts Payable Increase	Answer
Accrued Liabilities Decrease	Answer
Cash Flow Provided by Operating Activities	Answer
Cash Flow from Investing Activities
Sale of Equipment	Answer
Purchase of Land	Answer
Cash Used by Investing Activities	Answer
Cash Flow from Financing Activities
Issuance of Common Stock	Answer
Retirement of Bonds Payable	Answer
Payment of Dividends	Answer
Cash Used by Financing Activities	Answer
Net Increase in Cash	Answer
Cash at Beginning of Year	Answer
Cash at End of Year	Answer

Answer 1

$ 126,000 Fremont Corporation Statement of Cash flows For Year Ended December 31 Cash flows from Operating Activities: Net income Add (Deduct) items to convert net income to cash basis Depreciation Amortization Gain on sale of Equipment Accounts Receivables increase Inventory Decrease Prepaid Expenses increase Accounts payable Increase Accured Liabilities Decrease Cash flow provided by Operating Activities Cash Flows from Investing Activities Sale of Equipment Purchase of Land Cash used by Investing activities Cash Flows from Financing Activities Issuance of Common stock Repayment of Bonds payable Payment of Dividends Cash used by Financing Activities Net Increase in Cash Cash at Beginning of Year Cash at End of Year $ 65,000 $ 31,000 (12,000 (7,000) 11,000 $ (3,000) $ 14,000 $ (5,000 S220,000 $ | $ S 17,000 (81,000) (64,000) $ $ S S $ S 75,000 70,000) (41,000 (36,000) 120,000 21,000 141,000