Question

Accountants for Morston, Inc. have assembled the following data for the year ended December 31, 2018 in (Click the icon to view the current accounts.) Click the icon to view the transaction data.) Prepare Morston's statement of cash flows using the indirect method. Include an accompanying schedule of non-cash investing and financing activities. Complete the statement one section at a time, beginning with the cash flows from operating activities. (Use a minus sign or parentheses for amounts that result in a decrease in cash. If a box is not used in the statement, leave the box empty, do not select a label or enter a zero) Morston, Inc. Statement of Cash Flows Year Ended December 31, 2018 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by (Used for) Operating Activities

Answer 1

Answer:

Morston, Inc.
Statement of Cash flows
Year ended December 31,2018
Cash flows from operating activities:
Net income		$65,000
Adjustments to reconcile net income to Net cash
Provided by (Used for) Operating activities:
Depreciation expense	$19,000
Gain on sale of building	($6,500)
Decrease in accounts receivable	$5,600
Increase in accounts receivable	($6,000)
Increase in accounts payable	$1,200
Decrease in income tax payable	($1,600)	$11,700
Net cash provided by (used for ) operating activities (i)		$76,700
Cash flows from investing activities:
Purchase of equipment	($73,000)
Sale of building [58,000 book value + 6,500 gain]	$64,500
Net cash provided by (used for ) investing activities (ii)		($8,500)
Cash flows from financing activities:
Issuance of common stock	$36,000
Payment of notes payable	($51,100)
Payment of cash dividends	($53,000)
Issuance of notes payable	$61,000
Net cash provided by (used for ) financing activities (iii)		($7,100)
Net increase (decrease) in Cash (i+ii+iii)		$61,100
Cash balance, December 31,2017		$23,000
Cash balance, December 31,2018		$84,100