Question

Statement of Cash Flows (Indirect Method) Use the following information regarding the Newcastle Corporation to prepare a statement of cash flows using the indirect method: Accounts payable decrease $7,000 Accounts receivable increase 9,800 Wages payable decrease 4,200 Amortization expense 22.400 Cash balance, January 1 42,000 Cash balance, December 31 9,800 Cash paid as dividends 8,400 Cash paid to purchase land 140,000 Cash paid to retire bonds payable at par 105,000 Cash received from issuance of common stock 63,000 Cash received from sale of equipment 16.800 Depreciation expense 54,600 Gain on sale of equipment 19,600 Inventory increase 18,200 Net income 134,400 Prepaid expenses increase 11,200

Answer 1

134,400 NEWCASTLE CORPORATION Statement of Cash Flows For Year Ended December 31 Cash Flow from Operating Activities Net Income Add (deduct) items to convert net to cash basis Depreciation Amortization Gain on Sale of Equipment Accounts Receivable Increase Inventory Increase Prepaid Expenses Increase Accounts payable Decrease Wages payable Decrease Cash Flow Provided by Operating Activities Cash Flow From Investing Activities Sale of Equipment Purchase of Land Cash Used by Investing Activities Cash Flow from Financing Activities Issuance of Common Stock Retirement of Bonds payable Payment of Dividends Cash Used by Financing Activities Net Decrease in Cash Cash at Beginning of Year Cash at End of Year 54,600 22,400 (19,600) (9,800) (18,200) (11,200) (7,000) (4,200) 141,400 $ 16,800 (140,000) (123,200) 63,000 (105,000) (8,400) (50,400) (32,200) 42,000 9,800