a. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required.
Tru-Built Construction Inc. | |
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For the Year Ended December 31, 2014 | |
Cash flows from operating activities: | | | | | |
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Adjustments to reconcile net income to net cash flow from operating activities: | | | | | |
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Changes in current operating assets and liabilities: | | | | | |
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Net cash flow from operating activities | | | | | |
Cash flows from investing activities: | | | | | |
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Net cash flow provided by investing activities | | | | | |
Cash flows from financing activities: | | | | | |
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Net cash flow provided by financing activities | | | | | |
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Cash at the beginning of the year | | | | | |
Cash at the end of the year | | |
Statement of Cash FlowsIndirect Method
The comparative balance sheet of Tru-Built Construction Inc. for December 31, 2014 and 2013, is as follows:
| Dec. 31, 2014 | Dec. 31, 2013 |
Assets | | |
Cash | $122 | | $38 | |
Accounts receivable (net) | 69 | | 48 | |
Inventories | 44 | | 26 | |
Land | 99 | | 109 | |
Equipment | 56 | | 42 | |
Accumulated depreciation-equipment | (15) | | (8) | |
| Total | $375 | | $255 | |
Liabilities and Stockholders' Equity | | |
Accounts payable (merchandise creditors) | $47 | | $38 | |
Dividends payable | 8 | | - | |
Common stock, $10 par | 25 | | 12 | |
Paid-in capital in excess of par-common stock | 64 | | 30 | |
Retained earnings | 231 | | 175 | |
| Total | $375 | | $255 | |
The following additional information is taken from the records:
Land was sold for $25.
Equipment was acquired for cash.
There were no disposals of equipment during the year.
The common stock was issued for cash.
There was a $81 credit to Retained Earnings for net income.
There was a $25 debit to Retained Earnings for cash dividends declared.