Question

Condensed financial data of Blue Company for 2017 and 2016 are presented below.

BLUE COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 2017 2016 Cash $1,780 $1,170 Receivables 1,760 1,280 Inventory 1,620 1,880 Plant assets 1,910 1,670 Accumulated depreciation (1,210) (1,160 ) Long-term investments (held-to-maturity) 1,3301,440 $7,190 $6,280 Accounts payable Accrued liabilities Bonds payable Common stock Retained earnings $1,230 210 1,370 1,920 2,460 $7,190 $920 250 1,560 1,680 1,870 $6,280

Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017.

Prepare a statement of cash flows using the indirect method.

Answer 1

Amount $ 850 Blue Company Cashflow Statement using Indirect method for year 31st December 2017 :- Particulars Amount $ Cash Flows From Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by Add: Depreciation Expense (1210-1160) 50 Less: Gain on sale of investment (80) Changes in Working Capital :- Less: Increase in Accounts receivable (480) Add: Decrease in Inventory 260 Add: Increase in Accounts Payable 310 Less: Decrease in Accrued liabilities (40) 20 Cashflow from Operating Activities 870 Cash Flows From Investing Activities: Cash paid for Purchase of Plant Assets (1910-1670)-70 Cash received from sale of Long term investments (1440-1330)+80 Change in cash due to Investing Activties (170) 190 (260) (190) 170 Cash Flows From Financing Cash paid for Dividends Cash paid for retirement of Bonds Payable (1560-1370) Cash received from issue of common stock (1920-1680-70) Change in cash due to Financing Net Changes in Cashflow from all activities Cash at the beginning of the year Cash at the end of the year (280) 610 1,170 1,780