Question

Burns Corporation's net income last year was $97,400. Changes in the company's balance sheet accounts for the year appear below Increases (Decreases) Asset and Contra-Asset Accounts: $ 18,800 $ 13,800 $ (17,600) $ 4,400 $ 10,900 $75,600 $ 32,900 Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Long-term investments Property, plant, and equipment Accumulated depreciation Liability and Equity Accounts: Accounts payable $ (18,700) 17,100 $ 4,200 $ (64,200) $ 41,600 $ 93,000 Accrued 1iabilities Income taxes payable Bonds payable Common stock Retained earnings The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $4,400. Required: a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.) b. Prepare the investing activities section of the company's statement of cash flows for the year c. Prepare the financing activities section of the company's statement of cash flows for the year.

Answer 1

Cash flows from operating activities
Net Income		$     97,400
Adjustments to reconcile net income to ;
Depreciation expense	$    32,900
Increase in accounts receivable	$ (13,800)
Decrease in inventory	$    17,600
Increase in prepaid expense	$    (4,400)
Decrease in accounts payable	$ (18,700)
Increase in accrued liabilities	$    17,100
Increase in income tax payable	$       4,200
		$     34,900
Net cash provided by operating activities		$   132,300
Cash flows from investing activities
Cash paid to purchase of long term investment	$ (10,900)
Cash paid to Purchase of Property, Plant and equipment	$ (75,600)
Net cash used by investing activities		$   (86,500)
Cash flows from financing activities
Cash paid to retire bonds	$ (64,200)
Payment of dividends	$    (4,400)
Cash received from issuance of common stock	$    41,600
Net cash provided by financing activities		$   (27,000)

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