Part 2: Cash Flow Statement Preparation

The cash flow statement is an important, and often overlooked, financial statement. However, it can provide important data for use by internal organization management. By analyzing the balance sheet and income statement, the accountant can then prepare the statement and share the results with both internal and external users.

Use the Assessment 3, Part 2 Template to determine the appropriate activity (operating, investing, or financing) for each transaction listed for Skylar Enterprises, Inc., and prepare the cash flow statement using the indirect method in good form for reporting. Data is provided in the Information worksheet in the template; complete the statement of cash flow in the Cash Flow Statement worksheet. Use the suggested materials in the Resources if you need more information on preparing cash flow statements.

part 1

part 2

Column A Inflow Outflow & Operating Investing Financing 1. Sale of a piece of company equipment. 2. Sale of common stock. 3. Payment to suppliers for merchandise purchased. 4. Payment to lenders for interest on note payable. 5. Sale of investments in other companies. 6. Purchase of land to expand plant size. X 7. Payment to stockholders as cash dividends. 8. Sale of goods or services. 9. Payment to employees for wages and salaries. 10. Lending of money to other business entities. 11. Payment to government for property and income taxes. 12. Collection of principal on loans to other entities. 13. Interest and dividends received. 14. Issue of bonds to support company growth. 15. Purchase of investments in debt or equity of other entities. 16. Payment to other entities to cover expenses incurred. 17. Buyback of company stock from investors. X Download and save a copy of this Excel file. Using the information from this worksheet, prepare the cash flow statement on the next worksheet. Skylar Enterprises, Inc. Comparative Balance Sheets Assets Cash Accounts receivable Inventory Land Equipment Accum. Depreciation - Equipment 12/31/12 $73,000 $85,000 $170,000 $75,000 $260,000 $66,000 $597,000 1/1/12 $22.000 $76,000 $189,000 $100,000 $200,000 -$32,000 $555,000 Difference $51,000 $9,000 $19,000 $25,000 $60,000 $34,000 Total Liabilities and Equities Accounts payable Bonds payable Common stock Retained earnings $39.000 $150,000 $216,000 $192,000 $597,000 $47.000 $200,000 $174,000 $134,000 $555,000 $8,000 $50,000 $42,000 $68,000 Total Additional Information: 1. Net income for 2012 was $103.000. 2. Cash dividends of $45,000 were paid. 3. Bonds payable amounting to $55,000 were redeemed. 4. Common stock was issued for $42,000 cash. 5. No equipment was sold during 2012. 6. Land was sold at cost during 2012