Question

The 2017 comparative balance sheet and income statement of Summer Time Hardware Corp. follow. Summer Time had no non-cash investing and financing transactions during 2017. During the year, there were no sales of land or equipment, no issuance of notes payable, and no repurchase of shares transactions. E (Click the icon to view the comparative balance sheet.) | (Click the icon to view the income statement.) Requirements 1. Prepare the 2017 statement of cash flows, formatting operating activities by using the indirect method. 2. How will what you learned in this problem help you evaluate an investment? Requirement 1. Prepare the 2017 statement of cash flows, formatting operating activities by using the indirect method. Start by completing the cash flows from operating activities. Then, continue with completing the investing and financing activities sections. Finally, determine the net increase in cash. (Use a minus sign or parentheses for subtracting numbers that are typically shown enclosed in parentheses in a statement of cash flows.) Summer Time Hardware Corp. Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Decrease in accounts recievable Decrease in inventories Increase in prepaid expenses Increase in accounts payable Decrease in salary payable Decrease in other accrued liabilities Net cash provided by operating activities Cash flows from investing activities: Purchase of land Purchase of equipment Net cash used for investing activities Cash flows from financing activities: Payment of dividends Payment of note payable Enter any number in the edit fields and then continue to the next question.

Answer 1

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Summer Time Hardware Corp.
Cashflow statement
Indirect Method	Amount $	Amount $
Particulars
Cash flow from operating activities
Net Income		111,300.00
Adjustment to reconcile Net Income to Net Cash provided by operating activities
Depreciation Expense	4,300.00
Decrease in Accounts Receivable	3,200.00		Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap
Decrease in Inventories	4,200.00
Increase in prepaid expense	(1,100.00)
Increase in Accounts Payable	1,800.00
Decrease in Salary Payable	(4,700.00)
Decrease in other accrued liabilities	(2,600.00)	5,100.00
Net cash provided by operating activities		116,400.00
Cash flow from investing activities
Purchase of land	(28,900.00)
Purchase of equipment	(8,100.00)		See Note A
Net cash used for investing activities		(37,000.00)
Cash flow from financing activities
Payment of Dividends	(64,500.00)
Payment of note payable	(27,500.00)
Issuance of Common shares	24,000.00
Net cash used for financing activities		(68,000.00)	See Note B
Net increase in cash		11,400.00
Cash Balance, December 31, 2016		5,900.00
Cash Balance, December 31, 2017		17,300.00

Workings	Amount $	Note
Purchase of equipment
Change in equipment value	3,800.00
Add: Depreciation expense	4,300.00
Purchase of equipment	8,100.00	A
Payment of Dividends
Retained Earnings- Opening Balance	20,300.00
Add: Net Income	111,300.00
Less: Retained Earnings- Closing Balance	67,100.00
Payment of Dividends	64,500.00	B