Question

P17.7A Presented below are the financial statements of Rajesh Company RAJESH COMPANY Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation equipment Total 2012 S 35.000 33.000 27.000 60.000 (29.0% ) S126.000 2011 S 20.000 14.000 20.000 78,000 (24.000) S108.000) Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total S 29.000 7.000 27.000 18.00 45.000 S126.000 $ 15.000 8.000 33.000 14.000 38.000 $108.000 RAJESH COMPANY Income Statement For the Year Ended December 31, 2012 Sales revenue S242.000 Cost of goods sold 175.000 Gross profit 67.00 Operating expenses 24.000 Income from operations 43.000 Interest expense 3.00 Income before income taxes ( XI Income tax expense Net income S 32.000 Auditional data: 1. Dividends declared and paid were $25.000. .. During the year equipment was sold for $8.500 cash. This equipment cost $18.000 originally and had a book value of $8.500 at the time of sale. 3. All depreciation expense. S14.500. is in the operating expenses. 4. All sales and purchases are on account. structions a Prepare a statement of cash flows using the indirect method.

Answer 1

Rajesh Company
Statement of Cash Flow(Indirect Method)
December 31st,2012
Cash Flow from Operating Activities
Net Income		$                     32,000.00
Operating Activities
Depreciation Expense	$                                                           14,500.00
Increase in Accounts Receivable($33000-$14000)	$                                                          -19,000.00
Increase in Inventory($27000-$20000)	$                                                            -7,000.00
Increase in Accounts Payable($29000-$15000)	$                                                           14,000.00
Reduce in Income Tax Payable($7000-$8000)	$                                                            -1,000.00	$                        1,500.00
Net Cash Provided by Operating Activity=(A)		$                     33,500.00
Cash Flow from Investing Activities
Sale of Equipment(given)	$                                                              8,500.00
Cash Flow from Investing Activities=(B)		$                        8,500.00
Cash Flow fom Financing Activities
Issuance of common Stock($18000-$14000)	$                                                              4,000.00
Payment of Dividends(Given)	$                                                          -25,000.00
Redemption of Bonds($27000-$33000)	$                                                            -6,000.00
Net Cash used by Financing Activities=(C)		$                    -27,000.00
Net Increase in cash=(D )=(A)+(B)+(C )		$                     15,000.00
Cash at the beginning of the period=(E )		$                     20,000.00
Cash at the end of the period=(D )+(E )		$                     35,000.00