Question 6 [25 points) Bentley Inc. began operations on January 1, 2013. Its adjusted trial balance at December 31, 2014 and 2015 is shown below. Other information regarding Bentley Inc. and its activities during 2015 follow in (a) through (e): a. Assume all accounts have normal balances. b. Equipment was sold for cash of $35,900. c. Old machinery was sold for cash of $40,300. New machinery was purchased for $47,000 cash. d. Share capital was issued for cash. e. Cash dividends were declared and paid. Using the information provided, prepare a statement of cash flows (using the indirect method) for the year ended December 31, 2015. Bentley Inc. Adjusted Trial Balance December 31 Account 2015 2014 Accounts Payable 37,740 44,000 Accounts Receivable 54,200 79,750 Accumulated Depreciation, Equipment 2,700 72,000 Accumulated Depreciation, Machinery. 8,200 41,000 Allowance for Doubtful Accounts 6.200 17,750 Bentley Inc. Statement of Cash Flows For the Year Ended December 31, 2015 Cash flows from operating activities Net income 38,000 Depreciation expense 18,400 Adjust. to reconcile net income to cash provided by oper. act.: Gain on sale of equipment Loss on sale of machinery Increase in accounts receivable Decrease in merchandise inventory Increase in accounts payable. Bentley Inc. Adjusted Trial Balance December 31 Account 2015 2014 Accounts Payable 37,740 44,000 Accounts Receivable 54,200 79,750 Accumulated Depreciation, Equipment 2,700 72,000 Accumulated Depreciation, Machinery. 8,200 41,000 Allowance for Doubtful Accounts 6,200 17,750 Depreciation Expense, Equipment 12,400 12,400 Depreciation Expense, Machinery 6,000 6,000 Cash 380,590 300,000 Cash Dividends 27,000 27,000 Equipment 23,300 139,000 Machinery 67,200 101.000 Merchandise Inventory 76,850 67,000 Long-term Notes Payable 54,690 72,000 Other Expenses (including losses). 570,000 15,000 Retained earnings 91,000 76,000 Revenues (including gains). 626,400 75,400 Share capital 362,000 317,000 Unearned Revenue 28,610 32,000 statement of Cash FIOWS For the Year Ended December 31, 2015 Cash flows from operating activities Net income 38,000 Depreciation expense 18,400 Adjust to reconcile net income to cash provided by oper. act.: Gain on sale of equipment Loss on sale of machinery Increase in accounts receivable Decrease in merchandise inventory * Increase in accounts payable Decrease in unearned revenues Net cash inflow from operating activities * Cash flows from investing activities | Cash received from sale of equipment Cash received from sale of machinery Cash paid for machinery. Net cash inflow from investing activities Cash flows from financing activities * Cash received from issuing share capital Cash paid for dividends. Cash paid on long-term note + Net cash outflow from financing activities Net increase (decrease in cash Adjusted Trial Balance December 31 Account 2015 2014 Accounts Payable 37,740 44,000 Accounts Receivable 54,200 79,750 Accumulated Depreciation, Equipment 2,700 72,000 Accumulated Depreciation, Machinery.. 8,200 41,000 Allowance for Doubtful Accounts 6,200 17,750 Depreciation Expense, Equipment 12,400 12,400 Depreciation Expense, Machinery 6,000 6,000 Cash 380,590 300,000 Cash Dividends 27,000 27,000 Equipment 23,300 139,000 Machinery 67,200 101,000 Merchandise Inventory 76,850 67,000 Long-term Notes Payable 54,690 72,000 Other Expenses (including losses). 570,000 15,000 Retained earnings 91,000 76,000 Revenues (including gains). 626,400 75,400 Share capital 362,000 317,000 Unearned Revenue 28,610 32,000 Depreciation expense 18,400 Adjust. to reconcile net income to cash provided by oper. act.: + Gain on sale of equipment Loss on sale of machinery Increase in accounts receivable Decrease in merchandise inventory Increase in accounts payable. Decrease in unearned revenues Net cash inflow from operating activities Cash flows from investing activities + Cash received from sale of equipment Cash received from sale of machinery Cash paid for machinery. Net cash inflow from investing activities * Cash flows from financing activities Cash received from issuing share capital Cash paid for dividends Cash paid on long-term note Net cash outflow from financing activities Net increase (decrease) in cash. Cash at beginning of year Cash at end of year
