Question

Prepare a Cash Flow Statement.

Robust Robots, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2018 2019 $ Assets Current Assets: Cash Accounts Receivable, net Merchandise Inventory Supplies Prepaid Insurance Total Current Assets 65,000 150,000 135,000 9,700 30,000 389,700 $ $ $ $ $ $ 80,000 100,000 70,000 500 10,000 260,500 $ Property, plant, and Equipment: Equipment Less: Accumulated Depreciation - Equipment Total Property, Plant, and Equipment Total Assets $ $ $ $ 500,000 (80,000) 420,000 809,700 $ $ $ 240,000 (90,000) 150,000 410,500 4 Page

Answer 1

Answer with working notes is given below

Since no specific method is asked in question answer is given as per Indirect method of preparation

ROBUST ROBOTS INC. Cash Flow Statement under Indirect method Working notes: Cash flows from Operating Activities Amount Equipment Net Income $55,500 opening balance $240,000 Accumulated Dep $30,000 Add: Adjustments to reconcile net income to Bank (balance paid) $220,000 Bank $54,787 Depreciation $20,000 Long term note $130,000 P and L Account $5,213 Loss on sale of Equipment $5,213 closing balance $500,000 Changes in Working Capital $590,000 $590,000 Increase in Accounts Receivable ($50,000) Increase in Merchandise Inventory ($65,000) Increase in Supplies ($9,200) Accumulated Depreciation- Equipment Increase in prepaid insurance ($20,000) Equipment $30,000 Opening Balance $90,000 Increase in Accounts payable $110,000 P and L Account $20,000 Decrease in Unearned revenue ($10,000) Closing balance $80,000 (Depreciation during Increase in Salaries payable $10,000 the year) Net Cash provided by Operating Activities $46,513 $110,000 $110,000 Cash flows from Investing Activities Purchase of Equipment ($220,000) Sale of Equipment $54,787 Net Cash provided by Investing Activities ($165,213) Cash flows from Financing Activities Issue of Common stock $113,700 ($70,000+ $43,700) Dividend paid ($10,000) Net Cash used by Financing Activities $103,700 Net Cash inflow/(outflow) ($15,000) Opening balance of cash $80,000 Closing balance of cash $65,000 Significant non cash transaction Non Cash Investing and Financing Activity Equipment purchased by issue of Long term note payable $130,000 1