Velo Company
Comparative Balance Sheets
December 31
Assets |
2020 |
2019 |
||||
Cash |
$72,800 |
$33,200 |
||||
Accounts receivable |
86,500 |
70,700 |
||||
Inventory |
170,200 |
187,000 |
||||
Land |
72,700 |
100,700 |
||||
Equipment |
260,700 |
200,600 |
||||
Accumulated depreciation—equipment |
(65,700 |
) |
(33,500 |
) |
||
Total |
$597,200 |
$558,700 |
||||
Liabilities and Stockholders’ Equity |
||||||
Accounts payable |
$35,400 |
$46,500 |
||||
Bonds payable |
149,800 |
203,300 |
||||
Common stock ($1 par) |
218,000 |
173,000 |
||||
Retained earnings |
194,000 |
135,900 |
||||
Total |
$597,200 |
$558,700 |
Additional information:
1. | Net income for 2020 was $103,600. | |
2. | Cash dividends of $45,500 were declared and paid. | |
3. | Bonds payable amounting to $53,500 were redeemed for cash $53,500. | |
4. | Common stock was issued for $45,000 cash. | |
5. | No equipment was sold during 2020, but land was sold at cost. |
Prepare a statement of cash flows for 2020 using the indirect
method. (Show amounts that decrease cash flow with
either a - sign e.g. -15,000, or in parenthesis e.g.
(15,000).)
Velo Company Statement of Cash Flows December 31, 2020For the Year Ended December 31, 2020For the Month Ended December 31, 2020 |
||
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash |
||
Decrease in Inventory Depreciation Expense Purchase of Equipment Net Income Issuance of Common Stock Decrease in Accounts Receivable Sale of Land Increase in Accounts Receivable Increase in Inventory Payment of Cash Dividends Sale of Equipment Decrease in Accounts Payable Redemption of Bonds Increase in Accounts Payable Purchase of Land Sale of Bonds |
$ | |
Adjustments to reconcile net income to |
||
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash |
||
Decrease in Accounts Receivable Decrease in Accounts Payable Increase in Accounts Receivable Increase in Inventory Net Income Sale of Equipment Increase in Accounts Payable Sale of Bonds Depreciation Expense Decrease in Inventory Sale of Land Purchase of Equipment Issuance of Common Stock Payment of Cash Dividends Redemption of Bonds Purchase of Land |
$ | |
Issuance of Common Stock Purchase of Equipment Decrease in Inventory Decrease in Accounts Receivable Depreciation Expense Increase in Accounts Payable Decrease in Accounts Payable Sale of Equipment Sale of Land Increase in Inventory Payment of Cash Dividends Increase in Accounts Receivable Sale of Bonds Redemption of Bonds Purchase of Land Net Income |
||
Increase in Accounts Receivable Sale of Bonds Decrease in Accounts Receivable Decrease in Accounts Payable Purchase of Equipment Increase in Accounts Payable Sale of Land Decrease in Inventory Sale of Equipment Increase in Inventory Issuance of Common Stock Payment of Cash Dividends Redemption of Bonds Purchase of Land Net Income Depreciation Expense |
||
Payment of Cash Dividends Decrease in Accounts Payable Decrease in Inventory Increase in Inventory Redemption of Bonds Increase in Accounts Receivable Purchase of Land Sale of Equipment Decrease in Accounts Receivable Increase in Accounts Payable Sale of Land Purchase of Equipment Depreciation Expense Sale of Bonds Issuance of Common Stock Net Income |
||
Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash |
||
Answer-
VELO COMPANY | ||
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD) | ||
FOR THE YEAR ENDED DECEMBER 31,2020 | ||
Particulars | Amount | |
$ | ||
Cash flow from operating activities | ||
Net Income | 103600 | |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Adjustment for non cash effects | ||
Depreciation | 32200 | |
Change in operating assets & liabilities | ||
Increase in accounts receivable | -15800 | |
Decrease in inventory | 16800 | |
Decrease in accounts payable | -11100 | |
Net cash flow from operating activities (a) | 125700 | |
Cash Flow from Investing activities | ||
New equipment purchased | -60100 | |
Land sold | 28000 | |
Net cash Flow from Investing activities (b) | -32100 | |
Cash Flow from Financing activities | ||
Cash dividends paid | -45500 | |
Bonds payable paid | -53500 | |
Common stock issued | 45000 | |
Net cash Flow from Financing activities (c) | -54000 | |
Net Change in cash c=a+b+c | 39600 | |
Beginning cash balance | 33200 | |
Closing cash balance | 72800 |
Velo Company Comparative Balance Sheets December 31 Assets 2020 2019 Cash $72,800 $33,200 Accounts receivable 86,500...
Velo Company Comparative Balance Sheets December 31 Assets 2020 2019 Cash $72,800 $33,200 Accounts receivable 86,500 70,700 Inventory 170,200 187,000 Land 72,700 100,700 Equipment 260,700 200,600 Accumulated depreciation—equipment (65,700 ) (33,500 ) Total $597,200 $558,700 Liabilities and Stockholders’ Equity Accounts payable $35,400 $46,500 Bonds payable 149,800 203,300 Common stock ($1 par) 218,000 173,000 Retained earnings 194,000 135,900 Total $597,200 $558,700 Additional information: 1. Net income for 2020 was $103,600. 2. Cash dividends of $45,500 were declared and paid. 3. Bonds...
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