Question

Rojas Corporation's comparative balance sheets are presented below. ROJAS CORPORATION Comparative Balance Sheets December 31 2019 2020 Cash $14,600 $10,300 23,900 Accounts receivable 21,600 Land 20,500 25,900 Buildings 70,200 70,200 Accumulated depreciation-buildings (14,500) (10,800) $112,400 $119,500 Total Accounts payable $12,000 $28,200 74,000 73,300 Common stock Retained earnings 18,000 26,400 $112,400 $119,500 Total Additional information : 1. Net income was $22,900. Dividends declared and paid were $14,500. 2. No noncash investing and financing activities occurred during 2020 3. The land was sold for cash of $4,700 Prepare a statement of cash flows for 2020 using the indirect method. (Show amounts that decrease cash flow with either a sign e.g. -15,000, or in parenthesis e.g. (15,000).)

Answer 1

Statement of Cash Flows - Indirect Approach
	Amount in $	Amount in $
Net income		$             22,900
Cash flows from operating activities
Adjustments for reconcile the net income to:
Depreciation	$                3,700
Loss on sale of Land (5,400 - 4700)	$                   700
Decrease in account receivable	$                2,300
Decrease on account payable	$            -16,200
		$              -9,500
Net cash from operating activities		$             13,400
Cash flows from investing activities
Sale of Land	$                4,700
Net cash used in investing activities		$                4,700
Cash flows from Financing activities
Dividend Paid	$            -14,500
Issue of Common Stock	$                   700
Net cash used in financing activities		$            -13,800
Net increase in cash and cash equivalents		$                4,300
Add :Cash and cash equivalents at beginning of period		$             10,300
Cash and cash equivalents at end of period		$             14,600