Question

prepare the statement of cash flow using the indirect method Bowen corporation

25) An income statement and balance sheet of Bowen Company are presented below Additional information is also listed below. Plant assets were acquired for $47,000. Common stock was issued for $88,000 Equipment was sold for $35,000. Equipment was purchased for S20,000 by executing a note payable. A building was sold for $31,700. Treasury stock was sold for S45,000. Cash dividends of $15,000 were paid. Depreciation expense was for equipment - $4,000, plant asset - 54,100, and building - $6,000 Prepare the statement of cash flows using the indirect method. Bowen Corporation Balance Sheet December 31, 20x6 Cash Accounts Receivable Inventory Prepaid expenses Equipment Plant assets Building December 31, 20X6 $180,200 15,000 23,800 3,000 16,000 52,900 84,000 $374,900 December 31, 20X5 $15,000 28,600 17,000 5,700 36,400 10,000 114,500 $227200 537,400 5,500 15,000 Accounts payable (merchandise) Salary pavable Accrued liabilities Income tax payable Notes payable Common stock Treasury stock Retained earnings 3,800 117,000 138,000 0 58,200 S374.900 $16,000 4,000 19,300 3,000 97,000 50,000 (45,000) 82,900 $227,200

Answer 1

Answer with working is given below

Working notes: Bowen Corporation Cash Flow Statement Indirect Method Equipment Account $36,400 Depreciation $20,000 Bank Cash flows from Operating Activities Operating Loss Add: Adjustments for Loss on Sale of Equipment Profit on sale of building Depreciation Operating Loss before Working Capital changes Decrease in Accounts Receivable Increase in Inventory Decrease in Prepaid expenses Increase in Accounts payable Increase in Salaries payable Decrease in Accured Liabilities Increase in Income tax payable Net Cash provided by Operating Activities Cash flows from Investing Activities Sale of Equipment Sale of Building Purchaes of Plant Assets Net Cash provided by Investing Activities Cash flows from Financing Activities Dividneds paid Sale of treasury stock ISsue of Common Stock Net Cash provided by Financing Activities Net Cash inflow/(outflow) Opening balance of cash Closing balance of cash opening balance Note payable $4,000 ($9,700) $35,000 $1,400 P And L Account $1,400 closing balance $16,000 ($7,200) $14,100 ($1,400) $56,400 $56,400 Building Account $114,500 Depreciation $7,200 Bank $13,600 $6,000 opening balance ($6,800) Profit on sale $31,700 $2,700 $21,400 closing balance $84,000 $1,500 $121,700 $121,700 ($4,300) Plant Assets $800 $27,500 Openign balance Bank $10,000 Depreicaiton $4,100 $47,000 Closing balance $52,900 $35,000 $57,000 $31,700 $57,000 ($47,000) $19,700 Retained Earnings $15,000 Openign balance $58,200 Proft and Loss A/C Dividend paid ($15,000) $82,900 $45,000 Closing balance $88,000 $118,000 $165,200 $15,000 $180,200 $9,700 To P and LAccount $82,900 $82,900 Non Cash flow item Equipment of $ 20,000 purchased by exectuing a note payable