Question

12-3 The following information is available for Colaw Corporation for the year ended December 31, 2010 Beginning cash balance Accounts payable decrease Depreciation expense Accounts receivable increase Inventory increase Net income Cash received for sale of land at book value Sales Cash dividends paid Income tax payable increase Cash used to purchase building Cash used to purchase treasury stock Cash received from issuing bonds $ 35,000 3,200 172,000 8,200 13,000 269,100 35,000 747,000 12,000 4,700 114,000 32,000 150,000 Instructions Prepare a statement of cash flows using the indirect method.

Answer 1

Solution:

$269,100 F Statement of cash flows For the year ended December 31, 2010 Cash Flows from operating activities: Net Income Adjustments to reconcile net income to cash flow from operating activities: Depreciation expense Accounts Payable Decrease Accounts Receivable Increase Inventory Increase Income taxes Payable Increase $172,000 $3,200 $8,200 $13,000 $4,700 17 $152,300 $421,400 Net Cash Flow From Operating Activites Cash Flow from Investing Activities: Cash Received from Sale of Land Cash used to Purchase Building $35,000 $114,000 Net Cash Flow From Investing Activities (B) $79,000 Cash Flow from Financing Activities: Cash used to purchase Treasury stock Cash received from issuing bonds Payment of Dividend $32,000 $150,000 $12,000 Net Cash Flow From Financing Activities (C) $106,000 33 Total Cash flow from all activities (A+B+C) Cash at the beginning of the year Cash at the end of year $448,400 $35,000 $483,400 34 et1073 Sheet106 (21) Sheet577 (2) Sheet1076 Sheet1077