ON #2 avad 15 Hurley Inc., a software retailer, recently completed its 2031 operabons. The following informaton is red: Preps ding tot Hurley Inc. Comparative Balance Sheet Information KEP December 31 2031 December 31 2030 09 $89,040 Cash $150,990 54 390 65,100 Accounts Receivable 490,980 391,650 Merchandise Inventory 295,260 214,200 135, 240 85,680 Equipment Accumulated Depreciation Accounts Payable Income Taxes Payable Common Shares 99,750 107,730 12,600 18.900 579,600 462,000 Retained Earnings 156,450 93.660 Hurley Inc. Income Statement For the year ended December 31, 2031 Sales $1,707 300 Cost of Goods Sold 781,200 Gross Profit $926.100 Operating Expenses Depreciation Expense $49.580 Other Expenses 503,370 Total Operating Expenses Income from Operations Income Taxes 552,930 $373.170 125,580 Net Income $247.590 Additional information regarding Hurley's activities during 2031 1. Equipment was purchased for $81,060 cash 2. Issued 4,200 common shares for cash at $28 per share of cash dividends during the year 3. Declared and paid $ according to the indirect method. Show your supporting calculations uired Prepare a statement of cash flows for 2031 that reports the cash inflows and outflows from operating activities PREPARING A STATEMENT OF CASH FLOW - using the INDIRECT METHOD Comparative financial 2031 2030 information Calculate the Source $ change & or determine if it Use is an Increase or Decrease Balancing or Reconciling Cash Accounts Receivables Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable ncome Taxes Payable Common Shares Retained Earnings T asset asset USE SOURCE f liability or O/E SOURCE liability or O/E USE #1 Calculate the change in all accounts on the Balance Sheet #2 The Beginning and Ending Cash balances are transferred to the Cash Flow statement. #3 For all accounts other than cash, determine if the change is a source or use of cash or a reconciling figure. #4 Determine if the item will be reported in the Operating, Investing or Financing section of th Statement of Cash Flow. #5 Ensure that the change in each Balance Sheet account has been accounted for on the Cash Flow Statement. #6 Ensure that the Income Statement Accounts like Net Income, Depreciation Expense and ar Gains or Losses have been accounted for in the Statement. #7 Complete the Statement of Cash flow and ensure that it balances (from Beginning to endir cash). Reconcile Accumulated Depreciation Beginning Balance, Accumulated Depreciation + Depreciation Expense - Accumulated Depreciation for PP&E that has been sold = Ending Balance, Accumulated Depreciation Calculate Book Value of P.P. & Equipment Price Asset was sold for is This amount must be a source of cash. section as none sorel this part Original Cost of inent (Purchase Price) Accumulatepreciation for PP&E that has been Only if Gain or Loss on sold = Book Value GAIN (Sales Price > Book Value) LOSS (Sales Price
