Question

Statement of Cash Flows-Indirect Method The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as follows: Dec. 31, 20Y3 Dec. 31, 20Y2 Assets Cash $260,120 $240,850 Accounts receivable (net) 94,230 86,500 Inventories 266,000 256,120 Investments 0 99,230 Land 136,440 0 Equipment 293,490 226,440 Accumulated depreciation-equipment (68,710) (61,060) Total assets $981,570 $848,080 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $177,660 $167,070 Accrued expenses payable (operating expenses) 17,670 22,050 Dividends payable 9,820 7,630 Common stock, $10 par 53,000 41,560 Paid-in capital: Excess of issue price over par-common stock 199,260 115,340 Retained earnings 524,160 494,430 Total liabilities and stockholders' equity $981,570 $848,080 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: a. The investments were sold for $116,100 cash. b. Equipment and land were acquired for cash. c. There were no disposals of equipment during the year. d. The common stock was issued for cash. e. There was a $69,590 credit to Retained Earnings for net income. f. There was a $39.860 debit to Retained Earninas for cash dividends declared.

Answer 1

Livers Inc. 69590 Statement of Cashflow For the period ending 31.12.20Y3 Cashflow from Operating Activity Net Income Adjustments: Depreciation Expense Gain on sale of Investment (99230-116100) Increase in Accounts Receivable Increase in Inventories Increase in Accounts Payable Decrease in Accrued Expense Payable Cash generated from Operating Activity 7650 -16870 -7730 -9880 10590 -4380 -20620 48970 Cashflow from Investing Activity Investments sold Land Purchased Equipment Puchased (226440-293490) Cash used for Investing Activity 116100 -136440 -67050 -87390 11440 83920 -37670 Cashflow from Financing Activity Common Stock issued Paid in Capital in excess of issue price Dividends paid (7630+39860-9820) Cash generated from Financing Activity Net Increase in Cash Beginning Cash Balance Ending Cash Balance 57690 19270 240850 260120