Question

Prepare statement of cash flows using the indirect method. The income statement for 2017 and the balance sheets for 2017 and 2016 are presented for Harding ​Industries, Inc.

Harding Industries, Inc. Income Statement For the Year Ended December 31, 2017 Sales revenues $ 956,000 381,000 Less: Cost of goods sold Gross profit $575,000 Less operating expenses: Salaries and wages expense 190,000 Insurance expense 10,500 Depreciation expense 52,000 B4,000 Other operating expenses Total operating expenses 336,500 Operating income $ 238,500 Plus other income and less other expenses: Interest expense S 5,800 Gain on sale of PP&E 4.000 1,800 Total other income and expenses Income before income taxes $ 236,700 71,010 Less: Income tax expense $ 165,690 Net income

Prepare the statement one section at a time. ​(Use parentheses or a minus sign for numbers to be subtracted and for net cash​ outflows.)

Answer 1

Answer-

HARDING INDUSTRIES INC.
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED DECEMBER 31, 2017
Particulars		Amount
		$
Cash flow from operating activities
Net Income		165690
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation expense		52000
Gain on sale of PP&E		-4000
Change in operating assets & liabilities
Decrease in Accounts receivable		54000
Increase in inventory		-113000
Increase in prepaid insurance		-3000
Increase in accounts payable		27000
Decrease in wages payable		-1000
Increase in interest payable		800
Increase in income taxes payable		49010
Increase in other accrued expenses payable		3300
Net cash flow from operating activities (a)		230800
Cash Flow from Investing activities
New investments purchased		-12000
New equipment purchased		-40300
Old equipment sold		4300
Net cash Flow from Investing activities (b)		-48000
Cash Flow from Financing activities
Cash dividends paid		-36800
Bonds issued		48500
Bonds paid		-6500
Net cash Flow from Financing activities (c)		5200
Net Change in cash c=a+b+c		188000
Beginning cash balance		286000
Closing cash balance		474000