Question

Calculator On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method. Assume that equipment costing $25,000 was purchased for cash and no long-term assets were sold during the period Stock was issued for cash-3,200 shares at par Net income for the current year was $76,000. Cash dividends declared and paid were $13,000. Current Year Prior Year Assets Cash Accounts Receivable (net) Inventores Equipment Accumulated Depreciation Total assets $ 170,000 78,000 106,500 395,000 (195,000) 5554,500 $74,000 85,000 90,000 370,000 (158,000) 461,000 Liabilities and stockholders' equity Accounts Payable (merchandise creditors) Taxes Payable Common Stock 510 par Retained Earnings $51,000 2,500 262,000 239,000 554 500 $50,000 5,000 230,000 176,000 461 000 Total Labies and Stockholders' Equity Use the minus sian to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Answer 1

Answer :

Breach Co. Statement of cash flows For Year Ended December 31
Cash flow from operating activities
Net income	76000
Adjustment to reconcile net income to net cash flow from operating activities
Depreciation expense	37000
Changes in current assets and current liabilities
Decrease account receivable	7000
Increase inventory	-16500
Increase account payable	1000
Decrease taxes payable	-2500
Net cash flow from operating activities		102000
Cash flow from investing activities
Purchase equipment	-25000
Net cash used in investing activities		-25000
Cash flow from financing activities
Issue common stock	32000
Dividend paid	-13000
Net cash flow from financing activities		19000
Net cash flow		96000
Cash at the beginning of the year		74000
Cash at the end of the year		170000