Question

Sanders Company
Balance Sheets
At December 31, 2013 and 2012
			2013	2012			2013	2012
Cash…………………………………………..			42,000	27,000	Salaries payable…………………….		8,700	9,400
Accounts receivable…………………………………………..			27,200	31,700	Accounts payable…………………..		13,200	8,400
Inventory…………………………………………..			88,300	86,400	Notes payable……………………		90,000	75,000
Land…………………………………….			57,000	82,000	Bonds payable…………………….		80,000	100,000
Plant and equipment…………………………………………..			115,000	107,000	Common stock		25,000	22,700
Less: Accumulated depreciation…………………………………………..			50,300	47,400	Retained earnings…………………..		62,300	71,200
			279,200	286,700			279,200	286,700
Net income for 2013 was $88,800. No depreciable assets were sold during 2013.
Land was sold for a $6,000 gain in 2013
Prepare a cash flow statement in good form. Include a proper heading and appropriate descriptions for all items.

Answer 1

Answer-

SANDERS COMPANY
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED DECEMBER 31, 2013
Particulars		Amount
		$
Cash flow from operating activities
Net Income		88800
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation expense		2900
Gain on sale of land		-6000
Change in operating assets & liabilities
Decrease in Accounts receivable		4500
Increase in inventory		-1900
Increase in accounts payable		4800
Decrease in salaries payable		-700
Net cash flow from operating activities (a)		92400
Cash Flow from Investing activities
Plant & Equipmant purchased		-8000
Land sold		31000
Net cash Flow from Investing activities (b)		23000
Cash Flow from Financing activities
Cash dividends paid	($71200+$88800-$62300)	-97700
Common stock issued		2300
Bonds paid		-20000
Notes payable issued		15000
Net cash Flow from Financing activities (c)		-100400
Net Change in cash c=a+b+c		15000
Beginning cash balance		27000
Closing cash balance		42000