Question

System Announcements JUNI WIDYPLUS Course for Bronx Community College Exercise 17-09 (Video) Here are comparative balance sheets for Velo Company. Velo Company Comparative Balance Sheets December 31 Assets 2020 Cash $72,900 Accounts receivable 85,800 Inventory 170,100 Land 73,700 Equipment 259,700 Accumulated depreciation equipment (66,200) Total $596,000 Liabilities and Stockholders' Equity Accounts payable $35,000 Bonds payable 151,000 Common stock ($1 par) 216,400 Retained earnings 193,600 Total $596,000 2019 $32,600 71,300 186,800 100,200 200,200 (33,700) $557,400 $46,700 204,000 175,500 131,200 $557,400 Additional information: 1. Net Income for 2020 was $102,800. 2. Cash dividends of $40,400 were declared and paid. 3. Bonds payable amounting to $53,000 were redeemed for cash $53,000 4. Common stock was issued for $40,900 cash. 5. No equipment was sold during 2020, but land was sold at cost. Prepare a statement of cash flows for 2020 using the indirect method. (Show amounts that decrease cash flow with either as Vain Coman MacBook Pro a Search or type URL SABANAS

Answer 1

102,800 Velo Company Statement of Cash Flows For the year ended 31, December 2020 Cash flow from operating activities: Net income Adjustments to reconcile net income to: Depreciation expense 32,500 Less: Increase in accounts receivable - 14,500 Add: Decrease in inventory 16,700 Less: Decrease in accounts payable -11,700 23,000 125,800 -59,500 26,500 -33,000 Net cash flow from operating activities Cash flow from investing activities: Purchase of equipment Sale of land Net cash flow used for investing activities Cash flow from financing activities: Common stock Dividend paid Redemption of bond payable Net cash flow used for financing activities Net increase in cash Cash balance at the end of 2019 Cash balance at the end of 2020 40,900 -40,400 -53,000 -52,500 40,300 32,600 72,900