Question

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Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in preparing the statement of cash flows (indirect method) for ATM Software Developers. All amounts are in thousands (000s). ATM SOFTWARE DEVELOPERS Statement of Cash Flows For the year ended December 31, 2021 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash flows from operating activities Net cash flows from operating activities Cash Flows from Investing Activities Net cash flows from investing activities Cash Flows from Financing Activities Net cash flows from financing activities Net increase (decrease) in cash Cash at the beginning of the period Cash at the end of the period $ 2,325 7.640 $ 9,965 Listed below in random order are line items to be included in the statement of cash flows. Cash received from the sale of land Issuance of common stock Depreciation expense Increase in accounts receivable Decrease in accounts payable Issuance of long-ters notes payable Purchase of equipment Decrease in inventory Decrease in prepaid rent Payment of dividends Net income Purchase of treasury stock $8,530 12,775 5,405 3.970 1,700 16.195 39,565 1,415 8.45 6,250 11,280 2.555 Required: Prepare the statement of cash flows for ATM Software Developers using the indirect method. (List cash outflows and any decrease in cash as negative amounts. Enter your answers in thousands lie 10 000 000 should he antara ne in n i

Answer 1

Statement of cash flow (indirect method)

Particulars	Amount	Amount
Cash flow from operating activities
Net income	11,200
Adjustments to reconcile net income to net cash flow from operating activities
Depreciation expense	5,405
Increase in accounts receivable	(3,970)
Decrease in accounts payable	(1,700)
Decrease in inventory	1,415
Decrease in prepaid rent	845
Net cash flow from operating activities		13,195
Cash flow from Investing activities
Purchase of equipment	(39,565)
Sale of land	8,530
Net cash flow from Investing activities		(31,035)
Cash flow from Financing activities
Purchase of treasury stock	(2,555)
Issuance of common stock	12,775
Issuance of long term notes payable	16,195
Payment of dividends	(6,250)
Net cash flow from Financing activities		20,165
Net increase (decrease) in cash		2,325
Cash at the beginning of the period		7,640
Cash at the end of the period		$9,965

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