Question

Burns Corporation's net income last year was $99,000. Changes in the company's balance sheet accounts for the year appear below: Increases (Decreases) Asset and Contra-Asset Accounts: Cash Accounts receivable Inventory Prepaid expenses Long-term investments Property, plant and equipment Accumulated depreciation Liability and Equity Accounts: Accounts payable Accrued liabilities Income taxes payable Bonds payable Common stock Retained earnings $ 46,800 $ 37,000 $(44,000) $ 11,200 $ 55,000 $ 85,000 $ 61,000 $(44,000) $ 34,000 $ 64,000 $(75,000) $ 73,000 $ 78,000 The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $21,000. Required: a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.) (Amounts to be deducted should be indicated with a minus sign.) Burns Corporation's Statement of Cash Flows—Indirect Method (partial) Adjustments:

Answer 1

Amount Cash flow stalement for the year endo Particulars Cash flow from operating activities! Net Income after Tax Add! Income Two Payable Net Income before Tox 99000 64000 l, E3,00 o 61ooo 2, 94000 Addi Net Add! - Add: Depreciation cash flower before working capital changes Increase in Current liabilities Acceurred liabilities Decrease in current Asset Inventory Decrease in Currut Liabilities 34ooo 44000 Less! Accounts Payable (44000) lessi. Increase in current Asset Prepaid Expenses Accounts Receivable (11,200) (37,000) 2,09,800 i Net Cask flow from operating activities cash flow from Investing activities. Increax in Long terme Investment Property Plant & Equilment Net can outflow from Investing activities (45000) (8Sovo) (1,40,000)

33000 (75000) (91000) can flow from financing activities a Issue of Common stock. Payment to ponds payable Dividend paid durin the year Net cash outflow from financing activities Cash & Cash equivalent changes durity the year (ATBTC) (209800 - 23000 - 140000) (23,000). 46800