Question

Chapter 12 Indirect Method E12-7 Prepare the statement of cash flows using the Indirect Method Comparative Balance Sheets 2017 2016 Change Assets 68,000 Cash 22,000 46,000 88,000 76,000 12000 Accounts receivable Anventory 167.000 189.000 (22.000 Hand 80,000 100,000 (10,000) Equipment 260.000 200.000 0.000 Accumulated depreciation equipm (66,000) (32,000) 34.000) Total 597.000 555,000 42.000 Liabilities and Stockholders' Equity 2,017 2016 Accounts payable 39.000 43,000 200 Bonds payable 150,000 200.000 (50.000) Common stock ($1 par) 216,000 174,000 42.000 Retained earnings 192,000 138.000 54000 597,000 555,000 42.000 Additional information: -1.Net income for 2017 was $93.000. 2. Depreciation expense was $34.000 2.Cash dividends of $39,000 were declared and paid. 4. Bonds payable amounting to $50,000 were redeemed for cash $50,000 Common stock was issued for $42,000 cash. No equipment was sold during 2017, Land was sold for its book value. Total

Can you show my how to write a statement of cash flows? Mine is messed up. M

M

Answer 1

Answer-

STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED DECEMBER 31,2017
Particulars		Amount
		$
Cash flow from operating activities
Net Income		93000
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation expense		34000
Change in operating assets & liabilities
Increase in Accounts receivable		-12000
Decrease in merchandise inventory		22000
Decrease in accounts payable		-4000
Net cash flow from operating activities (a)		133000
Cash Flow from Investing activities
Land sold		20000
Equipment purchased		-60000
Net cash Flow from Investing activities (b)		-40000
Cash Flow from Financing activities
Cash dividends paid		-39000
Common stock issued		42000
Bonds payable paid		-50000
Net cash Flow from Financing activities (c)		-47000
Net Change in cash c=a+b+c		46000
Beginning cash balance		22000
Closing cash balance		68000