*** *** PR 13-2A Statement of Cash Flows-Indirect Method The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 2018 and 2017, is as follows: Dec 31, 20Y8 Dec 31, 2017 Assets Cash $ 95,000 $ 110,000 Accounts receivable (net). 260,000 280,000 Inventories 520,000 450,000 Prepaid expenses 15,000 5,000 Equipment....... 1,130,000 800,000 Accumulated depreciation-equipment. (235,000 (190,000 Total assets. $1,785,000 $1,455,000 Liabilities and Stockholders'Equity Accounts payable (merchandise creditors) $ 100,000 $ 75,000 Mortgage note payable......... 0 500,000 Common stock, $10 par.. 500,000 200,000 Pald-in capital in excess of par-common stock ........... 400,000 100,000 Retained earnings... 785,000 580,000 Total liabilities and stockholders' equity. $1,785,000 $1,455,000 *** . ... Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2018 are as follows: a. Net Income, $250,000 w b. Depreciation reported on the income statement, $135,000. c Equipment was purchased at a cost of $420,000 and fully depreciated equipment costing $90,000 was discarded, with no salvage realized d. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty e. 30,000 shares of common stock were issued at $20 for cash. Cash dividends declared and paid, $45,000 f Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Yellow Dog Enterprises Inc. Statement of Cash Flows For the Year Ended December 31, 2048 LI Cash flows from (used for) operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Decrease in accounts receivable Increase in inventory Increase in prepaid expenses Increase in accounts payable Net cash flow from operating activities Cash flows from (used for) investing activities: Cash paid for purchase of equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash received from sale of common stock Cash flows from (used for) financing activities: Cash received from sale of common stock Cash paid for dividends Cash paid to retire mortgage note payable Net cash flow from financing activities Net increase (decrease) in cash Cash balance, January 1, 2048 Cash balance, December 31, 2048 Optional: Credit Cash Accounts receivable (net) Inventory Prepaid expenses Equipment Accum deproquipment Yellow Dog Enterprises Inc. Spreadsheet (Work Sheet) for Statement of Cash Flows For the Year Ended December 31, 2048 Balance, Transactions Dec 31, 2017 Debit 110,000 280,000 450.000 5,000 800.000 (190,000) Balance, Dec 31, 2048 95.000 260.000 520.000 15.000 1.130,000 22 (235,000) (100,000) (190,000) (75.000) (500,000) (200,000) (100,000) (580,000) (500,000) |(400,000) (785,000) Accum. depr.- equipment Accounts payable Mortgage note payable Common stock, $10 par Paid-in capital in excess of par Retained earnings Totals Operating activities Net income Depreciation Decrease in accounts receivable Increase in inventory Increase in prepaid expenses Increase in accounts payable Investing activities Purchase of equipment Financing activities Payment of cash dividends Sale of common stock Payment of mortgage note payable Net change in cash Totals