Cash Flow Practice Problems

1. The partial comparative balance sheets for Grant Corporation are shown below.

December 31

2017 2016

Debits

Accounts Receivable $50,000 $53,000

Investments 12,000 38,500

Building -0- 70,000

Land 30,000 -0-

Equipment 84,000 62,700

Credits

Allowance for doubtful accounts 5,100 4,600

Accumulated depreciation on building -0- 32,000

Accumulated depreciation on equipment 68,000 66,600

Accounts payable 4,000 7,000

Long-term note payable 33,500 18,000

Common stock 60,000 50,000

Paid-in-capital in excess of par 35,000 30,000

Retained earnings 98,000 60,000

Additional information:

1. Net income for the year was $45,000.

2. A $15,000 note payable was issued in exchange for equipment

3. On January 1, 2010, the building was completely destroyed by a fire. Insurance

proceeds on the fire were $82,000, net of $12,000 tax.

4. Equipment that had cost $40,000 and was 60% depreciated was sold for $18,500.

5 The company issued a note payable in the amount of $25,000 for the acquisition of land

6. Investments were sold at $7,500 above their cost.

7. Dividends were declared and paid during the year

8. Income taxes of $8,000 were paid in cash.

Required: Prepare the operating, investing and financing section of the statement of cash flows, using the INDIRECT method. Include applicable notes.

Please, include working notes on how you got the answer!