Question
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
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 |
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