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gnment Exercise 12-7 comparative balance sheets for Bridgeport Company. Shown below are Bridgeport Company Comparative Balance Sheets December 31 Assets 2017 2016 Cash $143,888 $ 46,552 Accounts receivable 186,208 160,816 Inventory 353,372 399,924 Land 169,280 211,600 Equipment 550,160 423,200 Accumulated depreciation-equipment (139,656) (67,712) Total $1,263,252 $1,174,380 Liabilities and Stockholders' Equity Accounts payable Bonds payable $82,524 $90,988 317,400 423,200 Common stock ($1 par) 457,056 368,184 Retained earnings 406,272 292,008 Total $1,263,252 $1,174,380 Additional information: 1. Net income for 2017 was $196,788. 2. Denreciation exnense was $71.944. y Policy | 2000-2019 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc JUN 11 27 Total $1,263,252 $1,174,380 Liabilities and Stockholders' Equity Accounts payable $82,524 $90,988 Bonds payable 317,400 423,200 Common stock ($1 par) 457,056 368,184 Retained earnings 406,272 292,008 Total $1,263,252 $1,174,380 Additional information: 1. Net income for 2017 was $196,788. 2. Depreciation expense was $71,944 3. Cash dividends of $82,524 were declared and paid. 4. Bonds payable amounting to $105,800 were redeemed for cash $105,800. 5. Common stock was issued for $88,872 cash. 6. No equipment was sold during 2017. 7. Land was sold for its book value. Prepare a statement of cash flows for 2017 using the indirect method. (Show amou Bridgeport Company Statement of Cash Flows olicy I 2000-2019 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sc JUN 27 PLUS Kimmel, Accounting, 6e Study & Practice Assignment Downloadable eTextbook Gradebook ORION pen Assignment CALCULATO ER Bridgeport Company Statement of Cash Flows ESOURCES ow by Study Adjustments to reconcile net income to ment 1 Privacy Policy I2000-2019 John Wiley & Sons. Inc. All Rights Reserved. A Division of John Wiley & Sons. Inc. 27 DII F1 F2 E3 F4 FS F6 FB ice Assignment Gradebook Downloadable eTextbook nent Click if you would like to Show Work for this question: Open Show Work Policy I 2000-2019 John Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley &Sons. Inc. 11 27 W

Answer 1

A Cash flow statement provides the following information:

1) Information about company's cash receipt and cash payment during an accounting period.

2) Information about company's operating, investing and financing activities.

3) Information access the company's liquidity, solvency and financing flexibility.

Cash flow from operating activities (CFO), consists of the inflows and outflows of cash resulting from transactions that affect a firm's net income.

Cash flow from investing activities (CFI) consists of the inflow and outflows of cash resulting from the acquisition of long term assets and investment.

Cash Flow from financing activities (CFF) consists of the inflow and outflows of cash resulting from transactions affecting a firm's capital structure.

Bridgeport Company Statement of Cash Flows For the year ended 31st December 2017 Particulars Amount Amount Note 1 Closing Opening Increase Particulars Cash Flow from Operating Activity Net Income /(Decrease) Balance Balance Assets Accounts Receivable Inventory Accounts Payable $196,788 (A) (B) (A) - (B) $25,392 ($46,552) Adjustment Depreciation Expense $186.208 $160,816 o reconcile net income to $71,944 S353.372 $399,924 ($25,392) $82,524 $90,988 (S8,464) Increase in Accounts Receivable Decrease in Inventories Decrease in Accounts Payable $46,552 Increase in Assets is Cash Outflow and Decrease in Assets in Cash Inflow ($8,464) Increase in Liability is Cash Inflow and Decrease in Liability in Cash Outflow $84,640 Cash from Operating Activity $281.428 Cash Flow from Investing Activity Sale of Land [$211600-$169280] Purchase of Equipment [$423200 $550160] Cash used for Investing Activity $42,320 ($126,960) ($84,640) Cash Flow from Financing Activity Repayment ($105,800) $88,872 f Bond payable Issue Common Stock Dividend paid Cash used for Financing Activity Change in Cash and Cash Equivalents Add: Beginning Cash Balance Ending Cash Balance ($82.524) (599,452) $97,336 $46,552 $143,888