Question

Statement of Cash Flows (Indirect Method)
Use the following information regarding the Newcastle Corporation to prepare a statement of cash flows using the indirect method:

Accounts payable decrease Accounts receivable increase Wages payable decrease Amortization expense Cash balance, January 1 Cash balance, December 31 Cash paid as dividends Cash paid to purchase land Cash paid to retire bonds payable at par Cash received from issuance of common stock Cash received from sale of equipment Depreciation expense Gain on sale of equipment Inventory increase Net income Prepaid expenses increase $5,500 7,700 3,300 17,600 33,000 7,700 6,600 110,000 82,500 49,500 13,200 42,900 15,400 14,300 105,600 8,800

Remember to use negative signs with answers when appropriate.

Answer 1

Statement of Cash Flows
For Year Ended December 31
Cash Flow from Operating Activities
Net Income	105600
Add (deduct) items to convert net income to cash basis
Depreciation	42900
Amortization	17600
Gain on Sale of Equipment	-15400
Accounts Receivable Increase	-7700
Inventory Increase	-14300
Prepaid Expenses Increase	-8800
Accounts Payable Decrease	-5500
Wages Payable Decrease	-3300
Cash Flow Provided by Operating Activities	111100
Cash Flow from Investing Activities
Sale of Equipment	13200
Purchase of Land	-110000
Cash Used by Investing Activities	-96800
Cash Flow from Financing Activities
Issuance of Common Stock	49500
Retirement of Bonds Payable	-82500
Payment of Dividends	-6600
Cash Used by Financing Activities	-39600
Net Decrease in Cash	-25300
Cash at Beginning of Year	33000
Cash at End of Year	7700