Question

Chapter 13 Statement of Cash Flows 667 EX 13-17 Statement of cash flows-indirect method The comparative balance sheet of Olson-Jones Test w Obj. 2, 3, 4, 5 is as follows: December 31, 2012 and 207, sting $38 Dec 31, 2012 Dec 31, 2011 Assets Cash .... Accounts receivable (net).. $183 S 14 49 Inventories Land ...... 99 117 . . .. Equipment.......... 250 330 Accumulated depreciation--equipment.. 205 175 Total assets. (68) (42) $742 5625 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $ 51 Dividends payable..... Common stock, S1 par.... 125 Paid-in capital in excess of par-common stock ... 85 Retained earnings... 476 Total liabilities and stockholders' equity..... $742 The following additional information is taken from the records: a. Land was sold for $120. b. Equipment was acquired for cash. c There were no disposals of equipment during the year. d. The common stock was issued for cash. e. There was a $62 credit to Retained Earnings for net income. f. There was a $24 debit to Retained Earnings for cash dividends declared. Prepare a statement of cash flows, using the indirect method of presenting cash flows operating activities. - Was Olson-Jones's net cash flow from operations more or less than net income is the source of this difference? 13-18 Statement of cash flows-indirect method Obj. the errors you find in the following statement of cash flows. The cash balance at the begin rear was $240,000. All other amounts are correct, except the cash balance at the end of Shasta Inc. Statement of Cash Flows For the Year Ended December 31, 2049 ash flows from (used for) operating activities:

Answer 1

Solution:

Oison Jones Industries Inc.
Statement of Cash flows- Indierct method
For the year ending December 31, 20Y2
	$	$
Cashflows from operatinga activities
Net Income		62
Adjustment to reconcile net income to net cash flow from operatinga activities
Depreciation	26
Gain on sale of Land	-40	-14
Changes in current operating Assets and Liabilities
A/R increase	-6
Inventory increase	-18
Accounts payable Increase	14	-10
Net cash by Operating Activities		38
Cash flows from Investing Activities
Cash receivd for sale of land	120
Purchase of equipment	-30
Net cash by Investing Activities		90
Cash flows from Financing Activities
Cash dividends paid	-19
Cash received from issue of shares	60
Net cash by Financing Activities		41
Net increase in cash		169
Beginning cash balance		14
Ending Cash balance		183
W. N.
1) Gain on sale of Land = $250 + $120 - $330 = $40
2) Cash dividends = $24 - $5 = $19

Due to difference in depreciation, gain from sale of land, increase in accounts receivable, inventory and accounts payable,

cash flow from operation ($38) is less than the net income($62) of company