Question

The accounts below appear in the ledger of Concord Company.

		Retained Earnings		Dr.		Cr.		Bal.
Jan. 1, 2017		Credit Balance						$41,900
Aug. 15		Dividends (cash)		$15,100				26,800
Dec. 31		Net Income for 2017				$40,300		67,100
		Equipment		Dr.		Cr.		Bal.
Jan. 1, 2017		Debit Balance						$141,000
Aug. 3		Purchase of Equipment		$62,500				203,500
Sept. 10		Cost of Equipment Constructed		48,500				252,000
Nov. 15		Equipment Sold				$55,800		196,200
		Accumulated Depreciation—Equipment		Dr.		Cr.		Bal.
Jan. 1, 2017		Credit Balance						$83,200
Apr. 8		Major Repairs		$21,200				62,000
Nov. 15		Accum. Depreciation on Equipment Sold		25,200				36,800
Dec. 31		Depreciation for 2017				$17,000		53,800

From the postings in the accounts above, indicate how the information is reported on a statement of cash flows by preparing a partial statement of cash flows using the indirect method. The loss on sale of equipment (November 15) was $5,800.

Answer 1

Concord Company
Statement of Cash Flows (Partial)
For the Year Ended December 31, 2017
Cash flow from operating activities
Net Income	$40,300
Adjustments to reconcile net income to
Depreciation	$17,000
Loss on sale of equipment	$5,800
Net cash provided by (used in) opearting activities		$63,100
Cash flow from investing activities
Purchase of Equipment	-$62,500
Cost of Equipment Constructed	-$48,500
Sale of Equipment	$55,800
Major Repairs	-$21,200
Net cash provided by (used in) investing activities		-$76,400
Cash flow from financing activities
Cash Dividend Paid	-$15,100
Net cash provided by (used in) financing activities		-$15,100
Net increase (decrease) in cash and equivalents		-$28,400
Cash and equivalent at beginning of year		$0
Cash and equivalent at end of year		-$28,400