Question

the comparative balance sheet of Olson- Jones industries Inc. for December 31, 20Y2 and 20Y1, is as follows:                                                                                          Assets.                        dec. 31, 20Y2.          dec. 31, 20Y1                                                                           cash.                                       $183.                          $14.                   Accounts receivable (net)       55.                            49.         inventories.                               117.                            99.         land.                                            250.                           330.       equipment.                                205.                           175.           accumulated depreciation.     (68)                           (42)     total Assets.                              $742.                        $625.      liabilities and stockholders equity.                                        Accounts payable.                     $51.                        $37.        dividends payable.                       5.                             -            common stock, $1 par.            125.                          80.         paid in capital excess of issue. 85.                        70.      par- common stock.                                                                  retained earnings.                           476.                     438.      total liabilities and stockholders equity $742.     $625.         the following additional information is taken from the records.    1. land was sold for $120.   2. equipment was acquired for cash. 3. there were no disposables of equipment during the year. 4. the common stock was issued for cash.    5. there was a $62 credit to retained earnings for net income.    6. there was a $24 debit to retained earnings for cash dividends declared.       A) prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. using the minus sign to indicate cash out flows, cash payments, decrease in cash, or negative adjustments.

Answer 1

Cash Flow statement

Olson jones Industries

Particulars	Amount	Amount
Cash Flow from operating Activities
Net Profit		$62
Adjustments
Depreciation ($68 - $42)	$26
Gain on sale of land ($250 - $330 + $120)	($40)	($14)
Change in working capital
Increase in accounts payable ($51 - $37)	$14
Increase in Inventories ($99 - $117)	($18)
Increase in Account receivable ($49 - $55)	($6)	($10)
Cash flow from operating activities (I)		$38
Cash flow from Investing activities
Cash paid on Purchase of Equipment ($205 - $175)	($30)
Cash received on sale of land	$120
Cash received from investing activities (II)		$90
Cash received from Finance activities
Cash paid on dividends ($24 - $5)	($19)
Cash received on issue of common stock ($125+$85-$70-$80)	$60
Cash flow from finance activities (III)		$41
Change in cash (I + II + III)		$169
Add : Cash at the beginning of the year		$14
Cash at the end of year		$183