Complete the Memo to Will Harden using the statement of cash flows attached for Computer Services Company. Describe in no more than a two page memo to Will Harden the purpose of the statement of cash flows and why 3 or 4 of the adjustments were made.

Memo

To:Will Harden, Owner-President of Computer Services Company

From:

Date:

Re:Summary explanation of The Statement of Cash Flows for year ended Dec. 31^st 2014

Computer Services Company Statement of Cash Flows-Indirect Method For the Year Ended December 31, 2020 Cash flows from operating activities Net income $145,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense $ 9,000 Loss on disposal of equipment 3,000 Decrease in accounts receivable 10,000 Increase in inventory (5,000) Increase in prepaid expenses (4,000) Increase in accounts payable 16,000 Decrease in income taxes payable (2,000) 27,000 Net cash provided by operating activities 172,000 Cash flows from investing activities Purchase of building (120,000) Purchase of equipment (25,000) Sale of equipment 4,000 Net cash used by investing activities (141,000) Cash flows from financing activities Issuance of common stock 20,000 Payment of cash dividends (29,000) Net cash used by financing activities (9,000) Net increase in cash 22,000 Cash at beginning of period 33,000 Cash at end of period $ 55,000 Noncash investing and financing activities Issuance of bonds payable to purchase land $110,000 ILLUSTRATION 17.13 Statement of cash flows, 2020-indirect method