Question

Mike's Equipment's accountants assembled the following data for the year ended November 30, 2018. (Click the icon to view the data.) Prepare Mike's Equipment's statement of cash flows for the year ended November 30, 2018, using the indirect method. The cash balance for Mike's Equipment, Inc., at November 30, 2017, was $15,000. Begin by completing the cash flows from operating activities. (Use parentheses or a minus sign for numbers to be subtracted.) Mike's Equipment, Inc. Statement of Cash Flows Year Ended November 30, 2018 Cash flows from operating activities: Adjustments to reconcile net income to net cash provided by operating activities: 0 Data Table Net cash provided by (used for) operating activities Now complete the cash flows from investing activities. (Use parentheses or a minus sign for numbers to Cash flows from investing activities: 41,000 10,000 Net income ................$ Proceeds from issuance of common stock Payment of dividends.......... Increase in current assets other than cash Purchase of treasury stock...... 40,000 Purchase of equipment with cash ......... ...... $ 22,000 Decrease in current liabilities ....... 18,000 Payment of long-term note payable 39,000 Proceeds from sale of land ........ 9,000 Depreciation expense Net cash provided by (used for) investing activities 40,000 61,000 23,000 Next, complete the cash flows from financing activities. (Use parentheses or a minus sign for numbers to Cash flows from financing activities: Print Done Net cash provided by used for) financing activities Finally, complete the statement of cash flows. (Use parentheses or a minus sign for numbers to be subtracted.) Net increase (decrease) in cash: Cash balance, November 30, 2017 Cash balance, November 30, 2018

Answer 1

Ans.	Mike's Equipment, Inc.
	Statement of Cash Flows
	For the Year Ended November 30, 2018
	Particulars	Amount	Amount
	Cash flow from operating activities:
	Net income		$40,000
	Adjustments to reconcile Net income to Net cash
	provided by (used for) Operating Activities:
	Depreciation expense	$23,000
	Less: Increase in current assets	-$39,000
	Less: Decrease in current liabilities	-$10,000	-$26,000
	Net cash from operating activities		$14,000
	Cash flow from Investing activities:
	Cash received from sale of land	$61,000
	Purchase of equipment	-$41,000
	Net cash used by investing activities (B)		$20,000
	Cash flow from Financing activities:
	Issuance of common stock	$22,000
	Payment of dividends	-$18,000
	Purchase of treasury stock	-$9,000
	Payment of long term notes payable	-$40,000
	Net cash from financing activities ©		-$45,000
	Net increase in Cash (A + B + C)		-$11,000
	Add: Cash at beginning of period		$15,000
	Cash at ending of period		$4,000
	*Decrease in current liabilities and Increase in current assets other than cash is deducted from Net Income.
	*Increase in current liabilities and Decrease in current assets other than cash is added to Net Income.
	*Non cash & Non operating expenses are added to Net income.
	*Non cash & Non operating income are deducted from Net income.
	*Sale or purchase transation of property, plant and equipment are listed in the Investing activities section
	of cash flow statement.
	*Issue and redemption of shares and debentures and dividends paid are the financing activities.