Question

Question 17 (20 points) The following information is related to Somerset Company's fiscal year 2018. Income Statement: Net Income $4,000,000 Depreciation Expense 650,000 Gain on Sale of Plant Assets 50,000 Interest Expense 5,000 Balance Sheet - 12/31/17: Increase (Decrease) Accounts Receivable ($45,000) Plant Assets - Purchased 250,000 Plant Assets - Disposals (100,000) Additional Information: Common Stock exchanged for outstanding Long Term Notes Payable of $150,000 Dividends paid were $35,000 Use this information to prepare a partial Statement of Cash Flows for Somerset Company. Prepare only the section related to Cash Flows from Operating Activities. D oo - Format B IU - Partial Statement of Cash Flows: Somerset Company

Answer 1

Partial Statement of cash flows on Somerset Company Cash flow from Operating Activities : 18/ Net Income 4000,000 Add: Depreciation Expanse 6 $0,000 46 50,000 us. Decrease in Account Receivable 45000 Net Cash Generated from Cash Flows from Operating Activities 7605,000 Note: Othes Transaction point in this question are not part of cash flow from parating Activities. They are part of Cash from financing & Investing ctivities. Such as, Puschase of Plant and disposal of plant are part of Investing Activities