Exercise 13-8

Here are comparative balance sheets for Velo Company.

VELO COMPANY Comparative Balance Sheets December 31 Assets 2017 2016 Cash $ 73,000 $ 33,400 Accounts receivable 85,600 70,900 Inventory 170,000 186,900 Land 73,000 101,700 Equipment 260,700 200,800 Accumulated depreciationequipment (66,000 ) (33,700 ) Total $596,300 $560,000 Liabilities and Stockholders Equity Accounts payable $ 35,300 $ 47,100 Bonds payable 149,000 203,200 Common stock ($1 par) 216,300 172,000 Retained earnings 195,700 137,700 Total $596,300 $560,000

Additional information:

1. Net income for 2017 was $104,300. 2. Cash dividends of $46,300 were declared and paid. 3. Bonds payable amounting to $54,200 were redeemed for cash $54,200. 4. Common stock was issued for $44,300 cash. 5. No equipment was sold during 2017, but land was sold at cost.

Prepare a statement of cash flows for 2017 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000, or in parenthesis e.g. (15,000).)

VELO COMPANY Statement of Cash Flows December 31, 2017 For the Year Ended December 31, 2017 For the Month Ended December 31, 2017 Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Decrease in Accounts Payable Payment of Cash Dividends Redemption of Bonds Purchase of Equipment Increase in Accounts Payable Sale of Land Issuance of Common Stock Depreciation Expense Net Income Decrease in Inventory Increase in Inventory Increase in Accounts Receivable Decrease in Accounts Receivable $ Adjustments to reconcile net income to Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Payment of Cash Dividends Increase in Accounts Payable Sale of Land Purchase of Equipment Issuance of Common Stock Redemption of Bonds Net Income Decrease in Accounts Payable Depreciation Expense Decrease in Inventory Increase in Inventory Increase in Accounts Receivable Decrease in Accounts Receivable $ Decrease in Accounts Receivable Decrease in Accounts Payable Increase in Inventory Decrease in Inventory Redemption of Bonds Purchase of Equipment Issuance of Common Stock Payment of Cash Dividends Increase in Accounts Payable Net Income Depreciation Expense Increase in Accounts Receivable Sale of Land Increase in Accounts Receivable Increase in Inventory Depreciation Expense Decrease in Accounts Receivable Decrease in Accounts Payable Net Income Increase in Accounts Payable Sale of Land Decrease in Inventory Purchase of Equipment Issuance of Common Stock Payment of Cash Dividends Redemption of Bonds Decrease in Inventory Decrease in Accounts Payable Depreciation Expense Increase in Inventory Decrease in Accounts Receivable Increase in Accounts Receivable Redemption of Bonds Net Income Increase in Accounts Payable Purchase of Equipment Sale of Land Payment of Cash Dividends Issuance of Common Stock Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Decrease in Inventory Purchase of Equipment Sale of Land Net Income Depreciation Expense Increase in Inventory Increase in Accounts Payable Increase in Accounts Receivable Decrease in Accounts Receivable Decrease in Accounts Payable Issuance of Common Stock Payment of Cash Dividends Redemption of Bonds Redemption of Bonds Decrease in Inventory Payment of Cash Dividends Decrease in Accounts Receivable Purchase of Equipment Issuance of Common Stock Net Income Increase in Accounts Receivable Depreciation Expense Increase in Inventory Sale of Land Decrease in Accounts Payable Increase in Accounts Payable Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Decrease in Accounts Receivable Decrease in Inventory Increase in Accounts Receivable Issuance of Common Stock Increase in Inventory Decrease in Accounts Payable Increase in Accounts Payable Sale of Land Purchase of Equipment Depreciation Expense Payment of Cash Dividends Redemption of Bonds Net Income Decrease in Accounts Payable Net Income Payment of Cash Dividends Redemption of Bonds Depreciation Expense Increase in Accounts Receivable Decrease in Inventory Increase in Accounts Payable Decrease in Accounts Receivable Sale of Land Increase in Inventory Purchase of Equipment Issuance of Common Stock Decrease in Inventory Decrease in Accounts Payable Net Income Decrease in Accounts Receivable Increase in Accounts Receivable Depreciation Expense Increase in Inventory Increase in Accounts Payable Sale of Land Purchase of Equipment Issuance of Common Stock Redemption of Bonds Payment of Cash Dividends Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash $