Question

Problem 14-11 Missing Data; Statement of Cash Flows (L014-1, LO14-2] Yoric Company listed the net changes in its balance sheet accounts for the gast year as follows: Debits > Credits by: $ 96,500 170,900 Credits > Debits by: $ 83,000 4,300 114,800 Cash Accounts receivable Inventory Prepaid expenses Long-term loans to subsidiaries Long-term investments Plant and equipment Accumulated depreciation Accounts payable Accrued liabilities Income taxes payable Bonds payable Common stock Retained earnings 95,000 307,000 65,400 49,200 5,900 9,900 407,000 125,000 76,100 $804.600 $804,600 The following additional information is available about last year's activities: a. Net income for the year was $_? b. The company sold equipment during the year for $35,100. The equipment originally cost $160,700 and it had $126,700 in accumulated depreciation at the time of sale. C. Cash dividends of $11,000 were declared and paid during the year, d. The beginning and ending balances in the plant and Equipment and Accumulated Depreciation accounts are given below: Plant and equipment Accumulated depreciation Beginning Ending $2,892,000 $3,199,000 $ 985,600 $1,651,000

Answer 1

Statement of Cash Flows - Indirect Method
Cash Flow from Operating Activities
Net Income	$      76,100.00
Add: Dividend Paid	$      11,000.00
Net Income		$     87,100.00
Adjustments for :
Depreciation (65400+126700)	$    192,100.00
Profit on sale of Equipment (35100-(160700-126700))	$       (1,100.00)
Increase in accounts payable	$      49,200.00
Decrease in accrued liabilities	$       (5,900.00)
Increase in Income tax payable	$        9,900.00
Increase in Accounts Receivable	$ (170,900.00)
Decrease in Prepaid expenses	$        4,300.00
Decrease in inventory	$      83,000.00
		$   160,600.00
Net Cash Flow from Operating Activities		$   247,700.00
Cash Flow from Investing Activity
Sale of Equipment	$      35,100.00
Purchase of long term investment	$    (95,000.00)
Cash received from payment of long term loans to subsidiaries	$    114,000.00
Purchase of Plant and Equipment (307000+160700)	$ (467,700.00)
Net Cash Flow from Investing Activities		$ (413,600.00)
Cash Flow from Financing Activity
Dividend Paid	$    (11,000.00)
Purchase of treasury stock	$ (125,000.00)
Issue of bond	$    407,000.00
Net Cash Flow from financing Activity		$   271,000.00
Net Increase in cash during the year		$   105,100.00
Add: Opening cash balance		$   109,400.00
Ending cash Balance		$   214,500.00

a) Net Income = Increase in retained earnings + Dividend paid = $76100 + $11000 = $87100

Note: As profit after dividend is added to retained earnings

e) Ending cash balance = Opening cash balance + Increase in cash = $109400 + 105100 = 214,500