Question

PROBLEM VI The following information relates to Aires Corporation for 20x2 and 20x1 Aires Corporation Comparative Balance Sheets December 31, 20x2 and 20x1 s 21,00054, 000 ( 33,000) 421,000 480,000 (59,000) 310,000 340,000 (30,000) 17,000 15, 000 2,000 Assets Cash Accounts receivable (net) Inventory Prepaid expenses Investments Land Building (net) Equipment (net) Total assets 80,000 80,000 350,000 300,000 50,000 680,000 700,000 (20, 000) 520.000 340,000 180,000 $2,399,000 3,09,090,000 Liabilities $ 328,000 $ 335, 000 ( 7,000) Accounts payable Accrued liabilities Income taxes payable Bonds payable Long-term note payable Total liabilities 1,000 34, 000 (12,000) 410,000 700,000 (290,000) 0 130,000 $1,061,000 $1,239, 000 ($178,000) 170,000 171,000 22,000 130,000 Stockholders' Equity $ 800,000 600, 000 $200,000 Common stock Paid-in capital in excess of par 152,000 152,000 386, 000318, 000 value, common Retained earnings Total stockholders' equity Total liabilities and stockholders' 68, 000 $1,338,000 $1,070,000 $268, 000 equity Additional information: Net income for 20x2 was $143,000. Issued a long-term note payable in exchange for computer equipment for $130,000. Purchased computer terminals for $90,000 Depreciation on equipment for 20x2 was $40,000 Depreciation on building for 20x2 was $20,000. Reacquired bonds payable at par for $290,000. Declared and paid dividends Issued 20,000 shares of common stock at par value of $10 per share. Paid $50,000 for land intended for a new plant site. Required : Prepare a statement of cash flows using the indirect method. Include a schedule of noncash investing and financing transactions, if applicable.

Answer 1

cash flow statement cash flows from operating activities net income depreciation expense decrease in accounts receivable decrease in invento increase in prepaid expenses decrease in accounts payable increase in accrued liabilities decrease in incometax payable net cash inflow (outflow) from operating activities cash flows from investing activities purchase of computer terminals puchase of land net cash inflow (outflow) from investing activities cash flows from financing activities redemption of bonds pavable issue of common stock payment of dividend net cash inflow (outflow) from financing activities net cash inflow (outflow) from all activities beginning cash balance ending cash balance $ 143,000 $60,000 $ 59,000 $30,000 S(2,000 $ (7,000) $1,000 $ (12,000 $ 272,000 $ (90,000) $ (50,000 $ (140,000) S (290,000) $ 200,000 $ (75,000) calculation of dividend paid (318000+143000-386000) $ (165,000) $ (33,000) $54,000 $ 21,000 schedule of non cash investing and financing transactions issued long term note payable in exchange for computer equipment $ 130,000

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