E12-7 Preparing and Evaluating a Simple Statement of Cash Flows (Indirect Method) [LO 12-1, LO 12-2, LO 12-5) Suppose the income statement for Goggle Company reports $171 of net income, after deducting depreciation of $16. The company bought equipment costing $155 and obtained a long-term bank loan for $156. The company's comparative balance sheet, at December 31, is presented here. Required: 1. Calculate the change in each balance sheet account and indicate whether each account relates to operating, investing, and/or financing activities (+ for increase and for decrease). 2. Prepare a statement of cash flows using the indirect method. 6. Are the cash flows typical of a start-up, healthy, or troubled company? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 6 Calculate the change in each balance sheet account and indicate whether each account relates to operating, investing, and/or financing activities (+ for increase and - for decrease). (Select "NE" if there is no effect. Enter all amounts as positive values.) Previous Year Current Year 3837 94 213 355 154 595 (26) $ 1,072 S 295 464 Change Type + 320Cash + 119 Operating (201) Operating + 155 Investing (16) Operating Cash Accounts Receivable Inventory Equipment Accumulated Depreciation Equipment Total Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings + - 50 Operating 156 Financing BORE SET +P 171 Operating 550 1,072 $ S 1.458 Required 2 > O Required 1 Required 2 Required 6 Prepare a statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Doints ellook GOGGLE COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Depreciation Changes in Current Assets and Current Liabilities Increase in Accounts Receivable Decrease in Inventory Increase in Salaries and Wages Cash, Beginning of Current Year References Cash Flows from Investing 2 Cash Flows from Finan Equipment Purchased E12-7 Preparing and Evaluating a Simple Statement of Cash Flows (Indirect Method) (LO 12-1, LO 12-2 LO 12-5) Suppose the income statement for Goggle Company reports $171 of net income, ater deducting depreciation of $16. The company bought equipment costing 5155 and obtained a long-term bank loan for $156. The companys comparative balance sheet at December 31 is presented here ole i 100 Required: 1. Calculate the change in each balance sheet account and indicate whether each account relates to operating investing, and/or financing activities for increase and for decrease) 2. Prepare a statement of cash flows using the indirect method 6. Are the cash flows typical of a start-up, healthy, or troubled company? Complete this question by entering your answers in the tabs below Required Required 2 Are the cash flows typical of a start-up, healthy, or troubled company? Startup Company Healthy Company Troubled Company (Required 2
