Question

The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 2041, is as follows: Dec. 31, Dec. 31, 2011 204 Assets Cash Accounts receivable (net) Inventories Land (13) $315 $315 $217 $217 Equipment Accumulated depreciation-equipment Total Assets Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Dividends payable Common stock, $1 par Paid-in capital: Excess of issue price over par- common stock Retained earnings Total liabilities and stockholders' equity $315 $217 The following additional information is taken from the records: 1. Land was sold for $23. 2. Equipment was acquired for cash. 3. There were no disposals of equipment during the year. 4. The common stock was issued for cash. 5. There was a $68 credit to Retained Earnings for net income. 6. There was a $21 debit to Retained Earnings for cash dividends declared. a. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Answer 1

Cash flow statement reflects the changes in cash during the year from operating, investing and financing activities
Cash flow statement is shown below
Olson-Jones Industries Inc
Statement of cash flows
For the year ended December 31, 20Y2
Cash flow from operating activities:
Net income	$68
Adjustments to reconcile net income to cash flow from operating activities
Depreciation (13-7)	$6
Gain on sale of land (23-(92-83))	-$14
Changes in current operating assets and liabilities
Increase in accounts receivable (41-58)	-$17
Increase in inventories (22-37)	-$15
Increase in accounts payable (40-33)	$7
Net cash flow from operating activities		$35
Cash flows from (used for) investing activities
Cash from sale of land	$23
Cash used for purchase of equipment (36-47)	-$11
Net cash flow from investing activities		$12
Cash flows from (used for) financing activities
Cash from sale of common stock ((52-25)+(21-10))	$38
Cash used for dividends (21-6)	-$15
Net cash flow from financing activities		$23
Increase in cash		$70
Cash at the beginning of the year		$33
Cash at end of the year		$103