Instructions

Prepare a statement of cash flows using the indirect method.

Statement of Cash Flows. (16 points)

Sharp Company

Comparative Balance Sheet

December 31

2015 2014

Cash $ 54,000 $ 36,000

Accounts receivable, net 53,000 57,000

Inventory 161,000 123,000

Land 180,000 285,000

Building 300,000 300,000

Accumulated depreciationbuilding (75,000) (60,000)

Equipment 1,565,000 900,000

Accumulated depreciationequipment (177,000) (141,000)

$2,061,000 $1,500,000

Accounts payable $ 202,000 $ 150,000

Bonds payable 450,000 -0-

Capital stock, $10 par 1,250,000 1,250,000

Retained earnings 159,000 100,000

$2,061,000 $1,500,000

Additional Data:

1. Net income for the year amounted to $109,000.

2. Cash dividends were paid amounting to 4% of par value.

3. Land was sold for $120,000.

4. Sharp sold equipment, which cost $225,000 and had accumulated depreciation of $90,000, for $115,000.

Problem II
				Sharp Company
				Statement of Cash Flows
				For the Year Ended December 31, 2015
Cash flows from operating activities:
	Net Income
	Adjustments to reconcile net income to net cash
	provided by operating activities:
	Decrease in A/R
	Increase in inventory
	Increase in A/P
	Gain on sale of land
	Loss on sale of equipment
	Depreciation expense-building
	Depreciation expense-equipment
							0
	Net cash used/provided by operating activities						0
Cash flows from investing activities:
	Sale of land
	Sale of equipment
	Purchase of equipment
	Net case used by investing activities
	Net cash used/provided by investing activities						0
Cash flows from financing activities:
	Payment of cash dividend
	Issuance of bond
	Net cash used/provided by financing activities						0
Net increase/decrease in cash							0
Cash, January 1, 2015
Cash, December 31, 2015							0