Question

Condensed financial data of Flint Company for 2017 and 2016 are presented below.

FLINT COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016
		2017			2016
Cash		$1,790			$1,170
Receivables		1,780			1,310
Inventory		1,580			1,900
Plant assets		1,900			1,720
Accumulated depreciation		(1,180	)		(1,140	)
Long-term investments (held-to-maturity)		1,310			1,420
		$7,180			$6,380
Accounts payable		$1,220			$880
Accrued liabilities		210			240
Bonds payable		1,380			1,550
Common stock		1,930			1,660
Retained earnings		2,440			2,050
		$7,180			$6,380

FLINT COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017
Sales revenue		$6,690
Cost of goods sold		4,650
Gross margin		2,040
Selling and administrative expenses		930
Income from operations		1,110
Other revenues and gains
Gain on sale of investments		90
Income before tax		1,200
Income tax expense		550
Net income		650
Cash dividends		260
Income retained in business		$390

Additional information:

During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017.

Prepare a statement of cash flows using the indirect method.

Answer 1

Statement of Cash Flows
For the Year Ended December 31, 2017
Cash Flows from Operating Activities:
Net income		650
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	40
Gain on Sale of investments	-90
Increase in receivables	-470
Decrease in inventory	320
Increase in accounts payable	340
Decrease in accrued liabilities	-30
		110
Net cash provided by operating activities		760
Cash Flows from Investing Activities:
Purchase of Plant Assets	-110
Sale of Held-to-Maturity Investments	200
Net Cash Provided by Investing Activities		90
Cash Flows from Financing Activities
Payment of Cash Dividends	-260
Redemption of Bonds Payable	-170
Issuance of Capital Stock	200
Net Cash Used by Financing Activities		-230
Net Increase in Cash		620
Cash at Beginning of Period		1170
Cash at End of Period		1790
Noncash Investing and Financing Activities
Issuance of Common Stock for Plant Assets		70