Question

The financial statements of Pouchie Co. included the following information for the year ended December 31, 2019 (amounts in millions):

Depreciation and amortization expense	$	130
Cash dividends declared and paid		165
Purchase of equipment		410
Net income		192
Beginning cash balance		60
Proceeds of common stock issued		74
Proceeds from sale of building (at book value)		106
Accounts receivable increase		8
Ending cash balance		20
Inventory decrease		19
Accounts payable increase		22

Required:

Complete the following statement of cash flows, using the indirect method. (Amounts to be deducted should be indicated by a minus sign. Enter your answers in millions. (i.e., 5,000,000 should be entered as 5))

Answer 1

Answer-

POUCHIE CO.
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED 31 DECEMBER 2019
Particulars		Amount
		$ in millions
Cash flow from operating activities
Net Income		192
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation & amortization expense		130
Gain on sale of investments
Change in operating assets & liabilities
Increase in accounts receivable		-8
Decrease in inventory		19
Increase in accounts payable		22
Net cash flow from operating activities (a)		355
Cash Flow from Investing activities
New equipment purchased		-410
Investments sold
Building sold		106
Net cash Flow from Investing activities (b)		-304
Cash Flow from Financing activities
Cash dividends paid		-165
Common stock issued		74
Net cash Flow from Financing activities (c)		-91
Net Change in cash c=a+b+c		-40
Beginning cash balance		60
Closing cash balance		20