Question

Part B - Using the financial information provided below, prepare the Statement of Cash Flows. Xiong Corporation Cash Accounts Receivable Equipment Accumulated Depreciation - Equipment 12/31/2017 $ 8,550,000 $ 1,100,000 $ 1,750,000 $ (650,000) $10,750,000 1/1/2017 $ 6,575,000 $ 1,550,000 $ 1,450,000 $ (415,000) $ 9,160,000 Accounts Payable Common Stock Retained Earnings $ 1,250,000 $ 1,150,000 $ 8,350,000 $10,750,000 $ $ $ $ 955,000 1,150,000 7,055,000 9,160,000 $ $ Other Information Net income reported $ 1,495,000 Dividends paid $ 200,000 New Equipment was puchased and none was sold. Required: 1. Prepare the statement of cash flows for the year 2017.

Answer 1

Statement of Cash Flows (Indirect Method)
For the year ended December 31, 2017
	$	$
Cash Flow from Operating Activities
Net Income	1,495,000.00
Adjustments to reconcile net income to net cash provided by operations:
Income Statement items not affecting cash;
Depreciation expense (650,000 - 415,000)	235,000.00
Changes in current operating assets and liabilities:
Decrease in Accounts Receivable	450,000.00
Increase in accounts payable	295,000.00
Net Cash provided by Operating Activities		2,475,000.00
Cash Flows from Investing Activities:
Purchase of Equipment (1,750,000 - 1,450,000)	(300,000.00)
Net Cash used in Investing Activities		(300,000.00)
Cash Flows from Financing Activities:
Dividends paid	(200,000.00)
Net Cash used in Financing Activities		(200,000.00)
Net Increase in Cash		1,975,000.00
Add: Cash balance at the beginning of the year		6,575,000.00
Cash balance at the end of the year		8,550,000.00