Question

A comparative balance sheet for Pharoah 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 $ 72,730 $ 22,000 84,480 68,750 182,480 191,750 73,480 112,750 262,480 202,750 (71,480) (44,750) $604,170 $553,250 $ 36,480 150,000 214,000 203,690 $604,170 $ 49,750 200,000 164,000 139,500 $553,250 Additional information: 1. Net income for 2020 was $129,960. No gains or losses were recorded in 2020. 2. Cash dividends of $65,770 were declared and paid. 3. Bonds payable amounting to $50,000 were retired through issuance of common stock. Prepare a statement of cash flows for 2020 for Pharoah Corporation. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Add Less Operating Activities Net income Depreciation Increase in accounts receivable Decrease in inventory Decrease in accounts payable Net cash provided by(used) in Operating Activities $ 1,29,960.00 $ 26,730.00 (71480-44750) $ -15,730.00 (68750-84480) $ 9,270.00 (191750-182480) $ -13,270.00 (36480-49750) $ 1,36,960.00 Add less Investing Activities Purchase of Equipment Sale of Land Net cash provided by(used) in Investing Activities Add $ -59,730.00 202750-262480 $ 39,270.00 112750-73480 $ -20,460.00 Financing Activities Dividends paid Bonds paid Equity issued Net cash provided by(used) in Financing Activities $ -65,770.00 $ -50,000.00 $ 50,000.00 $ -65,770.00 Net increase or (decrease) in cash and cash equivalents Cash and cash equivalents at Beginning of year Cash and cash equivalents at End of year $ 50,730.00 $ 22,000.00 $ 72,730.00