Question

The following information is taken from Roswell Corporation's financial statements:

  December 31

2018 2017

Cash $92,000 $27,000

Account receivable    95,000    80,000

Allowance for doubtful accounts (4,500) (3,100)

Inventory   145,000 175,000

Prepaid expense     7,500 6,800

Land 93,000    60,000

Buildings 287,000 244,000

Accumulated amortization (35,000) (13,000)

Patents 20,000   35,000

  $700,000 $611,700

Account payable $ 90,000 $ 84,000

Accrued Liabilities 54,000 63,000

Bonds payable 125,000 60,000

Common shares 100,000 100,000

Retained earnings-appropriated 80,000 10,000

Retained earnings-unappropriated 266,000 302,700

Treasury stock, at cost    (15,000) (8,000)

$ 700,000 $ 611,700

For 2018 Year

Net income $ 53,300

Amortization expense. 22,000

Amortization of patent 7,000

Cash dividends of declared and paid 20,000

Gain or loss on sale of patents none

Instructions

Prepare a statement of cash flows for Roswell Corporation for the year 2002. (use the indirect method)

Answer 1

CASHFLOW STATEMENT FOR ROSWELL CORPORATION FOR THE YEAR 2002
		In $
Cash flows from operating activities
Net income		53300
Adjustments for:
Amortization Expense	22000
Amortization of Patent	7,000
		29,000
Increase in Allowance for Doubtful Accounts	1,400
Increase in Accounts Recievables	-15,000
Decrease in Inventory	30,000
Increase in Prepaid Expense	-700
Increase in Accounts Paybles	6,000
Decrease in Accrued Liabilities	-9,000
		12,700
Cash generated from operations		95,000
Cash flows from investing activities
Purchase of Land	-33,000
Purchase of Building	-43,000
Decrease in Patent	8000
Net cash used in investing activities		-68,000
Cash flows from financing activities
Increase in Bond Payble	65000
Increase in Treasury Stock	-7000
Dividends paid	-20,000
Net cash used in financing activities		38,000
Net increase in cash and cash equivalents		65,000
Cash and cash equivalents at beginning of period		27,000
Cash and cash equivalents at end of period		92,000