Question

Statement of Cash Flows-Indirect Method The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 2012 and 2041, is as follows: Dec. 31, 2012 Dec. 31, 2011 Assets Cash $183 o Accounts receivable (net) Inventories o Land 250 o on (68) $742 (42) $625 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 u un u 2 c Total liabilities and stockholders' equity $742 $625 The following additional information is taken from the records: 1. Land was sold for $120. 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 $62 credit to Retained Earnings for net income. 6. There was a $24 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 mir

Answer 1

	Statement of cash flow (Indirect method)
Cash flow from operating activities
net income for the year				62
Adjustments to reconcile net income from
operating activities
Depreciation expense				26
Gain on sale of land				-40
chanage in current opening assets & liabilities
increase in account receivable				-6
increase in inventory				-18
increase in accounts payable				14
Cash flow from operating activities					38
cash flow from investing activities
cash from sale of land				120
cash used for purchase of Equipment				-30
cash flow from investing activities					90
cash flow from financing activity
cash from stock issue				60
cash paid for dividend				-19
cash flow from financing activity					41
net increase in cash					169
cash at beginning of the year					14
cash at year end					183