Question
On the basis of the following data for Branch Co. for the current and preceding years ended December 31, prepare a statement of cash flows
On the basis of the following data for Branch Co. for the current and preceding years ended December 31, prepare a statement of cash flows for the current year using the indirect method. Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000. The stock was issued for cash and the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared and paid of $18,000. Current year Prior year Assets Cash $65,000 $54,000 Accounts receivable (net) 78,000 85,000 Inventories 106,500 90,000 Land 20,000 Equipment 495,000 370,000 Accumulated depreciation (215,000) (158,000) Total assets $529,500 $461,000 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $53,500 $55,000 Common stock, $10 par 200,000 170,000 Paid-in capital in excess of parcommon stock 62,000 60,000 Retained earnings 214,000 176,000 Total liabilities and stockholders' equity $529,500 $461,000 Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
On the basis of the following data for Branch Co. for the current and preceding years ended December 31, prepare a statement of cash flows for the current year using the indirect method. Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000. The stock was issued for cash and the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared and paid of $18,000. Current year Prior year Assets Cash $54,000 Accounts receivable (net) $65,000 78,000 106,500 Inventories Land 85,000 90,000 20,000 370,000 (158,000) $461,000 Equipment Accumulated depreciation 495,000 (215,000) $529,500 Total assets $53,500 $55,000 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Common stock, $10 par Paid-in capital in excess of par-common stock Retained earnings 200,000 170,000 60,000 62,000 214,000 $529,500 176,000 $461,000 Total liabilities and stockholders' equity Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities Cash flows from investing activities: Net cash flow used for investing activities Cash flows from financing activities: Net cash flow provided by financing activities Cash at the beginning of the year Cash at the end of the yearStep by Step Solution
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