Question
On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare a statement of cash flows
On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method. Assume that equipment costing $25,000 was purchased for cash and no long-term assets were sold during the period.
Stock was issued for cash-3,200 shares at par. Net income for the current year was $76,000. Cash dividends declared and paid were $13,000.
Current Year | Prior Year | |
Assets |
|
|
Cash | $ 170,000 | $74,000 |
Accounts Receivable (net) | 78,000 | 85,000 |
Inventories | 106,500 | 90,000 |
Equipment | 395,000 | 370,000 |
Accumulated Depreciation | (195,000) | (158,000) |
Total assets | $ 554,500 | $461,000 |
Liabilities and stockholders' equity |
|
|
Accounts Payable (merchandise creditors) | $51,000 | $50,000 |
Taxes Payable | 2,500 | 5,000 |
Common Stock, $10 par | 262,000 | 230,000 |
Retained Earnings | 239,000 | 176,000 |
Total Liabilities and Stockholders' Equity | $ 554,500 | $461,000 |
Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Breach Co. | ||
Statement of Cash Flows | ||
For Year Ended December 31 | ||
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 year | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started