Question

Selected financial information for the Adelphi Company for the fiscal years ended December 31, 2018 and 2017 follows. Prepare a cash flow statement using the indirect method. Properly title the statement. 2018 $113,500 142,500 42,000 2017 $37,500 162,000 35,000 125,000 50,000 135,000 5,000 Cash balance Net income Depreciation Expense Purchase of Plant Assets Disposal of Plant Assets Gain (Loss) on Disposal of Plant Assets Accounts Receivable Balance Accounts Payable Balance Interest Expense Income Taxes Paid Dividends Paid Common Stock Issued for Cash 58,000 40,000 (10,000) 64,500 42,000 8,000 35,000 30,000 20,000 39,000 6,000 28,000 25,000 0

Answer 1

ADHELPHI COMPANY
DECEMBER 31,2018
CASH FLOW STATEMENT - INDIRECT METHOD
Cash flow from operating activities:
Net Income		$        142,500.00
Adjustments for:
Depreciation	$      42,000.00
Loss on Disposal of plant assets	$      10,000.00
Interest expenses	$        8,000.00	$          60,000.00
Operating profit before working capital changes		$        202,500.00
Adjustments for:
Accounts receivable	$      (6,500.00)
Accounts payable	$        3,000.00	$          (3,500.00)
Cash generated from operating activities		$        199,000.00
Cash flow from investing activities
Purchase of Plant assets	$ (135,000.00)
Proceeds from Disposal of Plant assets ($40000-$10000 loss)	$      30,000.00
Net cash from investing activities		$     (105,000.00)
Cash from financing activities
Proceeds from issue of stock	$      20,000.00
Interest paid	$      (8,000.00)
Dividend paid	$    (30,000.00)
Net cash from financing activities		$        (18,000.00)
Net Increase in cash and cash equivalents		$          76,000.00
Add: Beginning cash balance		$          37,500.00
Ending cash balance		$        113,500.00