Question

operating activities ✓ Net cash flow from operating activities, $225,000 PR 13-2A Statement of cash flows-indirect method Obj. 2, 3, 4,5 the comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 2018 and 2017 is as follows: Dec. 31, 20Y8 Dec 31, 2017 Assets Cash.**** SHOW ME HOW TCL TEMPLATE $ 80,000 275,000 510,000 15,000 1,070,000 (200,000) $1,750,000 $100,000 300,000 400,000 10,000 750,000 (160,000) $1,400,000 Accounts receivable (net)..... Inventories... Prepaid expenses ...... Equipment..... Accumulated depreciation equipment.. Total assets. ****** ** Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) ... Mortgage note payable. Common stock, 510 par..... Paid-in capital: Excess of issue price over par-common stock Retained earnings.... Total liabilities and stockholders' equity.. $ 100,000 O 600,000 300,000 750,000 $1,750,000 $ 90,000 400,000 200,000 100,000 610,000 $1,400,000

Answer 1

Statement of Cash Flows using Indirect Method is shown as follows:-

Dog Enterprises Inc.

Statement of Cash Flows (Amounts in $)

Cash Flows from Operating Activities:-
Net Income		190,000
Adjustments to reconcile net income to operating cash flows:
Depreciation for the year	115,000
Decrease in Accounts Receivable (net) (300,000-275,000)	25,000
Increase in Inventories (510,000-400,000)	(110,000)
Increase in prepaid expenses (15,000-10,000)	(5,000)
Increase in Accounts Payable (100,000-90,000)	10,000	35,000
Net cash flows provided by operating activities (A)		225,000
Cash Flows from Investing Activities:-
Purchase of Equipment	(395,000)
Net cash used for investing activities (B)		(395,000)
Cash Flows from Financing Activities:-
Repayment of mortgage note payable	(400,000)
Issue of common stock (40,000 shares*$15)	600,000
Cash dividends paid	(50,000)
Net cash flows provided by financing activities (C)		150,000
Net decrease in cash (A+B+C)		(20,000)
Beginning Cash balance		100,000
Ending Cash Balance		80,000

Working notes:-

1) Decrease in current assets and increase in current liabilities are added to net income whereas increase in current assets and decrease in current liabilities are deducted from net income for calculating operating cash flows.