Question

Q1. a) Mike Corporation Accounts Department have compiled the following data for the year ended December 31st, 2019: 35,000 40.000 Payment of dividends. Proceeds from issuance of common shares Sales revenue Increase in operating current assets other than cash Repurchase of common shares, Cost of goods sold $ 6,000 Other operating expenses. Purchase of equipment 20,000 Decrease in operating current 224,000 liabilities Payment of note payable 30,000 Proceeds from sale of land. 5,000 Depreciation expense $100,000 5.000 30,000 60,000 8.000 Prepare the operating activities section of Mike's statement of cash flows for the year ended December 31, 2019. Please uses the indirect method for operating cash flows. Answer:

Answer 1

Solution:

Mike Corporation
Statement of Cash Flows
For the Year Ended December 31, 2019
Cash flows from operating activities:
Net Income [224000-100000-35000]	$         89,000
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense	$           8,000
Changes in current operating assets and liabilities
Increase in operating current assets other than cash	$       (30,000)
Decrease in operating current liabilities	$         (5,000)
Net cash provided by operating activities[A]		$          62,000