Question

Statement of Cash Flows—Indirect Method

The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as follows:

		Dec. 31, 20Y3		Dec. 31, 20Y2
Assets
Cash		$244,600		$230,160
Accounts receivable (net)		88,610		82,660
Inventories		250,140		244,740
Investments		0		94,820
Land		128,300		0
Equipment		275,980		216,380
Accumulated depreciation—equipment		(64,610)		(58,350)
	Total assets	$923,020		$810,410
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)		$167,070		$159,650
Accrued expenses payable (operating expenses)		16,610		21,070
Dividends payable		9,230		7,290
Common stock, $10 par		49,840		39,710
Paid-in capital: Excess of issue price over par-common stock		187,370		110,220
Retained earnings		492,900		472,470
	Total liabilities and stockholders’ equity	$923,020		$810,410

Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:

1. The investments were sold for $110,940 cash.
2. Equipment and land were acquired for cash.
3. There were no disposals of equipment during the year.
4. The common stock was issued for cash.
5. There was a $58,520 credit to Retained Earnings for net income.
6. There was a $38,090 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Livers Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y3
Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities		$
Cash flows from investing activities:
	$
Net cash flow used for investing activities
Cash flows from financing activities:
	$
Net cash flow from financing activities
		$
Cash at the beginning of the year
Cash at the end of the year		$

Answer 1

$ 58,520 $ $ 6,260 (16,120) $ $ $ $ Livers Inc. Statement of Cash flows For the Year Ended December 31, 20Y3 Cash flows from Operating Activities: Net Income Adjustments to reconcile Net Income to net Cash flows from Operating activities Depreciation expenses Gain on sale of investments Changes in Current Operating assets and liabilities: Increase in Accounts Receivables Increase in Inventory Increase in Accounts payable Decrease in Accured expenses payable Net Cash flow from operating activities Cash Flows from Investing Activities Sale of Investments Purchase of land Purchase of Equipment Net Cash flow Used for investing activities Cash Flows from Financing Activities Payment of dividends Issuance of Common stock Net Cash flow from financing activities Net Increase in Cash Cash at the beginning of period Cash at the end of period (5,950) (5,400) 7,420 (4,460) $ $ (18,250) 40,270 $ 110,940 $ (128,300) $ (59,600) $ (76,960) $ $ (36,150) 87,280 $ $ $ $ 51,130 14,440 230,160 244,600