Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Prepare statement of cash flows using the INDIRECT method using following balance sheet and additional data ( ignore taxes ) Comparative balance sheet accounts of

Prepare statement of cash flows using the INDIRECT method using following balance sheet and additional data (ignore taxes)
image text in transcribed

Comparative balance sheet accounts of Stellar Inc. are presented below. Stellar Inc. Comparative Balance Sheet Accounts As of December 31, 2025 and 2024 December 31 Debit Accounts Cash Accounts Receivable Inventory Equity Investments Machinery Buildings Land Credit Accounts Allowance for Doubtful Accounts Accumulated DepreciationMachinery Accumulated DepreciationBuildings Accounts Payable Accrued Payables Long-Term Notes Payable Common Stock, no-par Retained Earnings 2025 $41,600 70,400 30,000 22,100 29,900 67,800 7,500 $269,300 $2,200 5,700 13,700 35,000 3,300 20,800 150,000 38,600 $269,300 2024 $33,600 60,600 24,200 38,200 18,800 56,900 7,500 $239,800 $1,500 2,200 9,100 25,000 2,600 31,300 125,000 43,100 $239,800 Prepare a Statement Of cash flows using the indirect method. cash or in parenthesis e.g. (15,000).) STELLAR INC. Statement of Cash Flows (Indirect Method) Adjustments to reconcile net income to takes : 1. 2. 3. 4. 5. Net income for the year was $41,600. Cash dividends declared and paid during the year were $21,100. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments (level of ownership is less than 20%) that cost $24,900 were sold during the year for $28,700. No unrealized gains and losses were recorded on these investments in 2025. Machinery that cost $3,700, on which $750 of depreciation had accumulated, was sold for $2,150. Stellar's 2025 income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $8,850 depreciation and $5, 127 bad debts) Income from operations Other: Gain on sale of investments $3,800 Loss on sale of machinery (800) Net income Your answer is incorrect. $541,900 381,900 160,000 121,400 38,600 3,000 $41,600 Compute net cash flow from operating activities using the direct method. (Enternegativeamounts negative sign Net cash flow from operating activities

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Financial Reporting And Analysis

Authors: David Young, Jacob Cohen

3rd Edition

1118470559, 9781118470558

More Books

Students also viewed these Accounting questions