Question

The comparative balance sheets of Wildhorse Inc. at the beginning and the end of the year 2020 are as follows. Jan. 1, 2020 Inc./Dec. WILDHORSE INC. BALANCE SHEETS Dec. 31, 2020 Assets Cash $ 46,620 Accounts receivable 95,230 Equipment 43,230 Less: Accumulated Depreciation-Equipment 21,230 Total $ 163,850 Liabilities and Stockholders' Equity Accounts payable $ 24,230 Common stock 101,620 Retained earnings 38,000 Total $163,850 $ 14,620 90,610 24,610 11,000 $118,840 $32,000 Inc. 4,620 Inc. 18,620 Inc. 10,230 Inc. $ 17,610 82,610 18,620 $118,840 6,620 Inc. 19,010 Inc. 19,380 Inc. Net income of $48,230 was reported, and dividends of $28,850 were paid in 2020. New equipment was purchased and none was sold. Prepare a statement of cash flows for the year 2020. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Answer

WILDHORSE INC.
Statement of Cash Flows (Indirect Method)
For Year Ending Dec. 31, 2020
Cash Flow from Direct Operating Activities
	Amount ($)
Cash Flows From Operating Activities
Net Income	$            48,230
Adjustments to reconcile net income to
Depreciation Expense	$            10,230
Increase in Accounts Recievable	-$              4,620
Increase in accounts payable	$              6,620
Net Cash Provided by Operating Activities	$            60,460
Cash flows from investing:
Purchase of Equipment	-$            18,620
Net cash flow - investing activities:	-$            18,620
Cash flows from financing:
Cash paid for Dividends	-$            28,850
Common Stock issued	$            19,010
Net cash flow financing activities:	-$              9,840
Net increase in Cash balance	$            32,000
Cash as of January 1,2020	$            14,620
Cash as of December 31, 2020	$            46,620
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