Question

LUS Wygun RCCOUNY PICipies, 12e Help System Announcements k Exercise 17-8 Here are comparative balance sheets for Velo Company. VELO COMPANY Comparative Balance Sheets December 31 Assets 2017 2016 Cash Accounts receivable Inventory Land Equipment Accumulated depreciation-equipment Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings Total $72,700 86,300 169,700 72,200 260,400 (65,700) $595,600 $33,400 71,100 187,500 101,400 199,300 (34,300) $558,400 $35,500 148,300 217,500 194,300 $595,600 $47,500 203,300 172,500 135,100 $558,400 Additional information: 1. Net income for 2017 was $104,100. 2. Cash dividends of $44,900 were declared and paid. 3. Bonds payable amounting to $55,000 were redeemed for cash $55,000. 4. Common stock was issued for $45,000 cash. 5. No equipment was sold during 2017, but land was sold at cost. Prepare a statement of cash flows for 2017 using the indirect method. (Show amounts VELO COMPANY Statement of Cash Flows to search

Answer 1

B C 1 VELO COMPANY Statement of Cash Flows 2 For the Year Ended December 31, 2017 4 Cash flows from operating activities: $ 104,100 5 Net income Adjustments to reconcile net income to 6 7 Net cash provided by operating activities $31,400 $-12,000 $-15,200 $ 17,800 8 Depreciation expense 9 Decrease in accounts payable 10 Increase in accounts receivable 11 Decrease in inventory $ 22,000 $ 126,100 12 13 Net cash provided by operating activities 4 15 Cash flows from investing activities: 16 Sale of land 17 Purchase of equipment $ 29,200 $-61,100 $-31,900 18 Net cash used by investing activities 19 20 Cash flows from financing activities: $-55,000 $45,000 $ -44,900 21 Redemption of bonds 22 Issuance of common stock 23 Payment of cash dividends $ -54,900 24 Net cash used by financing activities 25 $39,300 26 Net increase in cash 27 Cash at beginning of period 28 Cash at end of period $ 33,400 $72,700

A C 1 VELO COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 2 4 Cash flows from operating activities: 104100 5 Net income 6 Adjustments to reconcile net income to 7 Net cash provided by operating activities 8 Depreciation expense 9 Decrease in accounts payable 10 Increase in accounts receivable 11 Decrease in inventory -65700-34300 = 35500-47500 =71100-86300 = 187500-169700 SUM(B8:B11) +C5+C12 12 13 Net cash provided by operating activities 14 15 Cash flows from investing activities: 16 Sale of land - 101400-72200 17 Purchase of equipment = 199300-260400 18 Net cash used by investing activities +B16+B17 19 20 Cash flows from financing activities: 21 Redemption of bonds -55000 22 Issuance of common stock 45000 23 Payment of cash dividends 24 Net cash used by financing activities -44900 +B21+B22+B23 25 |-+C13+C18+С24 26 Net increase in cash 27 Cash at beginning of period 28 Cash at end of period 33400 +C26+C27