Exercise 16-7

Preparing the statement of cash flows (indirect method) LO2, 5, 6 CHECK FIGURE: Net cash inflow from operating activities = $160,300

Required Use the Western Environmental Inc. information given below to prepare a statement of cash flows for the year ended June 30, 2020, using the indirect method.

a. A note is retired at carrying value.

b. The only changes affecting retained earnings during 2020 are profit and cash dividends paid.

c. New equipment is acquired during 2020 for $73,980.

d. The profit on sale of equipment costing $61,980 during 2020 is $3,600.

e. Prepaid expenses and wages expense affect other expenses on the income statement.

f. All sales and purchases of merchandise were on credit