Question

Question 3 View Policies Current Attempt in Progress The following information is available for Kingbird, Inc. for the year ended December 31, 2022. Beginning cash balance Accounts payable increase Depreciation expense Accounts receivable decrease Inventory decrease Net income Cash received for sale of land at book value Cash dividends paid Income taxes payable decrease Cash used to purchase land Cash used to redeem bonds Cash received from issuing stock $ 30,000 7,125 51,250 6,000 3,875 71.500 130.000 47,500 4,875 101,250 82,500 200.000 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 eg. (15,000).)

Answer 1

Indirect Method
Cash Flow from Operating Activities
Net Income		$           71,500
Adjustments
Depreciation	$         51,250
Changes in Current Assets/ Current Liabilities
Decrease in Accounts Receivable	$           6,000
Decrease in inventory	$           3,875
Increase in Accounts Payable	$           7,125
Decrease in Income Tax Payable	$         -4,875
Total Adjustments		$           63,375
Cash from Operating Activities			$         134,875
Cash flow from Investing Activities
Sale of Land		$         130,000
Purchase of Land		$       -101,250
Net cash used In investing activities			$            28,750
Cash flow from Financing Activities
Issue of Common Stock		$         200,000
Redemption of Bonds		$          -82,500
Dividend Paid		$          -47,500
Net cash used in financing activities			$            70,000
Increase in Cash			$         233,625
Opening Balance of Cash			$            30,000
Closing Balance of Cash			$         263,625