Question

1.2.

Hardware Suppliers reports net income of $157,000. Included in net income is a gain on the sale of land of $16,000. A comparison of this year's and last year's balance sheets reveals an increase in accounts receivable of $27,000, an increase in inventory of $16,000, and a decrease in accounts payable of $47,000. Required: Prepare the operating activities section of the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.) HARDWARE SUPPLIERS Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities

3.

Answer 1

Answer-1)-

HARDWARE SUPPLIERS
STATEMENT OF CASH FLOWS PARTIAL (USING INDIRECT METHOD)
Particulars		Amount
		$
Cash flow from operating activities
Net Income		157000
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Gain on sale of land		-16000
Change in operating assets & liabilities
Increase in accounts receivable		-27000
Increase in inventory		-16000
Decrease in accounts payable		-47000
Net cash flow from operating activities		51000

2)-

SOFTWARE DISTRIBUTORS
STATEMENT OF CASH FLOWS PARTIAL (USING INDIRECT METHOD)
Particulars		Amount
		$
Cash flow from operating activities
Net Income		45000
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation		5000
Loss on sale of land		4000
Change in operating assets & liabilities
Decrease in accounts receivable		15000
Decrease in inventory		10000
Increase in accounts payable		35000
Net cash flow from operating activities		51000

3)-

PLASAMA SCREENS CORPORATION
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED 31 DECEMBER 2021
Particulars		Amount
		$
Cash flow from operating activities
Net Income		73000
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation		156000
Change in operating assets & liabilities
Decrease in accounts receivable		14400
Increase in inventory		-15400
Increase in prepaid rent		-2400
Increase in accounts payable		14400
Decrease in interest payable		-6600
Increase in income taxes payable		3400
Net cash flow from operating activities (a)		236800
Cash Flow from Investing activities
New equipment purchased		-116000
Net cash Flow from Investing activities (b)		-116000
Cash Flow from Financing activities
Cash dividends paid		-27000
Notes payable paid		-110000
Net cash Flow from Financing activities (c)		-137000
Net Change in cash c=a+b+c		-16200
Beginning cash balance		131200
Closing cash balance		115000