Question

The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: 1 Dec. 31, 20Y8 Dec. 31, 20Y7 2 Assets 3 Cash $146,590.00 $180,310.00 4 Accounts receivable (net) 223,920.00 242,510.00 5 Inventories 322,020.00 298,480.00 6 Prepaid expenses 12,710.00 9,770.00 7 Equipment 654,640.00 536,710.00 8 Accumulated depreciation-equipment (170,680.00) (132,810.00) 9 Total assets $1,189,200.00 $1,134,970.00 10 Liabilities and Stockholders’ Equity 11 Accounts payable (merchandise creditors) $239,470.00 $238,540.00 12 Mortgage note payable     0.00 335,820.00 13 Common stock, $10 par 506,000.00 206,000.00 14 Paid-in capital: Excess of issue price over par—common stock 430,000.00 310,000.00 15 Retained earnings 13,730.00 44,610.00 16 Total liabilities and stockholders’ equity $1,189,200.00 $1,134,970.00 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows: A. Net income, $123,310 B. Depreciation reported on the income statement, $83,570 C. Equipment was purchased at a cost of $163,630 and fully depreciated equipment costing $45,700 was discarded, with no salvage realized. D. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty. E. Cash dividends declared and paid, $154,190 Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Yellow Dog Enterprises Inc. Statement of Cash Flows (Label) 1 Cash flows from operating activities: 2 3 Adjustments to reconcile net income to net cash flow from operating activities: 4 5 Changes in current operating assets and liabilities: 6 7 8 9 10 11 12 Cash flows from investing activities: 13 14 15 16 Cash flows from financing activities: 17 18 19 20 21 22 Cash at the beginning of the year 23 Cash at the end of the year

Answer 1

Solution:

Yellow dog enterprises inc.
Statement of Cash Flows
For year ended Dec 31, 20Y8
Particulars	Details	Amount
Cash Flow from Operating Activities:
Net Income	$123,310.00
Adjustments to reconcile net income to net cash provided by operations:
Depreciation Expense	$83,570.00
Decrease in accounts receivables ($242,510 - $223,920)	$18,590.00
Increase in inventory ($322,020 - $298,480)	-$23,540.00
Increase in prepaid expenses ($12,710 - $9,770)	-$2,940.00
Increase in accounts payable ($239,470 - $238,540)	$930.00
Net Cash provided by operating activities		$199,920.00
Cash Flow from Investing Activities:
Purchase of equipment	-$163,630.00
Net Cash used in Investing activities		-$163,630.00
Cash Flow from Financing Activities:
Proceed from issue of common stock	$420,000.00
Dividend Paid	-$154,190.00
Repayment of note	-$335,820.00
Net Cash Provided by financing activities		-$70,010.00
Net Increase / (Decrease) in Cash		-$33,720.00
Cash balance at beginning of year		$180,310.00
Cash balance at end of year		$146,590.00