Question

As the accountant for Awesome Foods Incorporated, you are responsible for preparing the cash flow statement. You have decided to prepare the statement using the indirect method and have gathered the following data from the accounting records:

Principal payments on non-current debt$ 50,000

Collections on accounts receivable287,500

Increase in accounts payable25,300

Acquisition of equipment by issuing non-current note payable70,000

Depreciation expense71,500

Collection of loan principal58,000

Proceeds from sale of investments, not including $5,100 gain49,100

Increase in accounts receivable7,200

Cash payments to purchase capital assets62,000

Decrease in accrued liabilities30,600

Payment of cash dividends43,500

Income tax expense and payments39,300

Proceeds from sale of capital assets, not including $7,400 loss22,600

Net income143,100

Cash sales217,400

Proceeds from issuance of common shares300,000

Increase in inventory41,700

Loan to another company50,000

Bonds payable converted into common shares130,000

Payments to suppliers283,100

Decrease in prepaid expenses12,800

Cash balance: December 31, 201662,500

Cash balance: December 31, 2017462,200

Prepare the cash flow statement for the year ended December 31, 2017, using the indirect method.

Answer 1

Answer-

AWESOME FOODS INCORPORATED
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED 31 DECEMBER,2017
Particulars		Amount
		$
Cash flow from operating activities
Net Income		143100
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation expense		71500
Loss on sale of equipment		7400
Gain on sale of investments		-5100
Change in operating assets & liabilities
Increase in accounts receivable		-7200
Incresae in inventory		-41700
Decrease in prepaid expenses		12800
Decrease in accrued liabilities		-30600
Increase in accounts payable		25300
Net cash flow from operating activities (a)		175500
Cash Flow from Investing activities
New capital assets purchased		-62000
Old capital assets sold		22600
Proceeds from sale of investments		49100
Net cash Flow from Investing activities (b)		9700
Cash Flow from Financing activities
Cash dividends paid		-43500
Principal payments of non-current debt		-50000
Collection of loan principal		58000
Proceeds from issuance of common shares		300000
Loan to another company		-50000
Net cash Flow from Financing activities (c)		214500
Net Change in cash c=a+b+c		399700
Beginning cash balance		62500
Closing cash balance		462200
Schedule of non cash investing & financing activities
Acquisition of equipment by issuing non-current note payable	$70000
Bonds payable converted into common shares		$130000