The following are accounting items taken from the records of the Biden Company for 2017: Cash...
The following are accounting items taken from the records of the Biden Company for 2017:
Cash payment to stockholders as dividends $40,000
Decrease in accounts payable $48,000
Decrease in accounts receivable $62,000
Increase in inventories $19,200
Increase in salaries payable $40,000
Net income for 2017 $136,000
Cash payment for purchasing land and building $128,000
Cash payment for reducing long-term notes payable
(principal payment: $44,000; interest expense and payment: $2,400) $46,400
Cash received from issuance of ten-year bonds payable at par value $160,000
Depreciation expense $24,000
Amortization expense 7,000
Cash received from sale of patent rights $64,000
Gain on the sale of patent rights 12,000
Purchase equipment by issuing long-term notes $70,000
Cash (at the beginning of 2019) $560,000
Required:
Prepare the Statement of Cash Flows for Biden Company for 2017 using the indirect method. You are required to use Excel (including Excel functions) to complete the assignment.
Homework Answers
| Cash Flow Statement | |||
| Indirect Method | |||
| Cash flow from Operating Activities | |||
| Net Income | $ 1,36,000.00 | ||
| Adjustments | |||
| Depreciation | $ 40,000.00 | ||
| Amortization | $ 7,000.00 | ||
| Gain on sale of patent rights | $ -12,000.00 | ||
| Change In current assets & Liabilities | |||
| Decrease in accounts receivable | $ 62,000.00 | ||
| Increase in inventories | $ -19,200.00 | ||
| Decrease in Accounts payable | $ -48,000.00 | ||
| Increase in salaries payable | $ 40,000.00 | ||
| Total Adjustments | $ 69,800.00 | ||
| Cash from operating activities | $ 2,05,800.00 | ||
| Cash flow from Investing Activities | |||
| Cash payment for purchasing land and building | $ -1,28,000.00 | ||
| Sale of patent rights | $ 64,000.00 | ||
| Cash used in investing activities | $ -64,000.00 | ||
| Cash flow from Financing Activities | |||
| Cash payment for reducing long-term notes payable | $ -44,000.00 | ||
| Cash received from issuance of ten-year bonds payable | $ 1,60,000.00 | ||
| Dividend Paid | $ -40,000.00 | ||
| Cash from financing activities | $ 76,000.00 | ||
| Net Increase in cash | $ 2,17,800.00 | ||
| Opening Balance of Cash | $ 5,60,000.00 | ||
| Closing Balance of Cash | $ 7,77,800.00 | ||
| Non Cash Financing and Investing activity | |||
| Purchase equipment by issuing long-term notes | $ 70,000.00 | ||
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