Question

A comparative balance sheet for Flounder Corporation is presented as follows. Assets Cash Accounts receivable Inventory Land Equipment Accumulated Depreciation Equipment Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings Total December 31 2020 2019 $ 72,690 $ 22,000 83,430 67,740 181,430 190,740 72,430 111,740 261,430 201,740 (70,430) (43,740) $600,980 $550,220 $35,430 150,000 214,000 201,550 $600,980 $ 48,740 200,000 164,000 137,480 $550,220 Additional information: 1. 2. Net income for 2020 was $127,860. No gains or losses were recorded in 2020. Cash dividends of $63,790 were declared and paid. Pondo nulo o rotira 2 imtina totoo throuhiceancofcommonctacle

Answer 1

Answer

Flounder corporation

Statement of cash flow

    For the Year Ended 31st December, 2020

Particulars	$	$
Cash flow from operating activities
Net profit	127,860
Add depreciation	26,690
Add decrease in inventory	9,310
Less increase in account receivables	(15,690)
Less decrease in account payable	(13,310)
Cash flow from operating activities		134,860
Cash flow from investing activities
Purchase of equipment	(59,690)
Sale of land	39,310
Cash flow from financing activities		(20,380)
Cash flow from financing activities
Dividend paid	(63,790)
Cash flow from financing activities		(63,790)
Increase in cash		50,690
Beginning cash balance		22,000
Ending cash balance		72,690

Calculations

Increase in cash

= 134,860 + (20,380) + (63,790) = $50,690

Depreciation can be find by taking the difference between accumulated depreciation in 2019 and 2020.

Depreciation expense = 70,430 - 43,740 = $26,690

* Bond retirement by issuing common stock $50,000 is a non cash transaction, so it is not taken in cashflow statement.

Cash dividend is taken in financing activities as a outflow.

If YOU are like the answer please upvote.