Reporting Land Acquisition for Cash and Mortgage Note on Statement of Cash Flows On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. 1 Balance 244,500 Feb. 10 Purchased for cash Purchased with long-term mortgage note 376,500 503,000 621,000 1,124,000 Nov. 20 Item Section of Statement of Cash Flows Added or Deducted Purchase of land for cash Purchase of land by issuing long-term mortgage note Determining Net Income from Net Cash Flow from Operating Activities Curwen Inc. reported net cash flow from operating activities of $179,800 on its statement of cash flows for the wear ended December 31. The following information was reported in the "Cash flows from operating activities" section of the statement of cash flows, using the indirect method: $4,200 10,500 Decrease in income taxes payable Decrease in inventories Depreciation Gain on sale of investments 16,200 7,300 2,900 Increase in accounts payable Increase in prepaid expenses Increase in accounts receivable 1,800 7,900 a. Determine the net income reported by Curwen Inc. for the year ended December 31. b. Curwen's net income is different than net cash flow from operating activities. Which of the following could possibly be the reason for such difference? a. Because depreciation expense which has no effect on cash flows from operating activities. b. Changes in current operating assets and liabilities that are added or deducted. c. Changes in fixed assets and liabilities that are added or deducted d. Gain from sales of investment is included in net income while the sales proceeds are added in operating activities of cash flow statements, Statement of Cash Flows-Indirect Method The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 2012 and 2041, is as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $183 $14 55 49 Accounts receivable (net) Inventories 117 99 Land 250 330 205 175 (68) $742 $625 Equipment Accumulated depreciation equipment Total assets Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Dividends payable Common stock, $1 par Pald-in capital in excess of par-common stock Retained earnings $51 $37 5 125 80 85 70 476 438 Total liabilities and stockholders' equity $742 $625 The following additional Information is taken from the records: a. Land was sold for $120. The following additional Information is taken from the records: a. Land was sold for $120. b. Equipment was acquired for cash. c. There were no disposals of equipment during the year. d. The common stock was issued for cash e. There was a $62 credit to retained Earnings for net income. f. There was a $24 debit to retained Eamings for cash dividends declared. a. Prepare a statement of cash flows, using the Indirect method of presenting Cash flows from operating activities. Use the minus sign to Indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Olson-Jones Industries, Inc. Statement of Cash Flows For the Year Ended December 31, 2012 Cash flows from (used for) 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 Net cash flow from operating activities Cash flows from (used for) Investing activities: Net cash flow from Investing activities Cash flows from (used for) financing activities: Net cash flow from financing activities $ Cash balance, January 1, 20Y2 Cash balance, December 31, 20Y2 b. Was Olson-Jones's net cash flow from operations more or less than net income? The source(s) of the difference are: a. Gain on the sale of land b. Purchase of equipment c. Sale of common stock d. Changes in current operating assets and liabilities Net cash flow from investing activities Cash flows from (used for) financing activities: $ Net cash flow from financing activities Cash balance, January 1, 20Y2 Cash balance, December 31, 2012 b. Was Olson-Jones's net cash flow from operations more or less than net income? The source(s) of the difference are: a. Gain on the sale of land b. Purchase of equipment c. Sale of common stock d. Changes in current operating assets and liabilities e. Depreciation expense f. Dividends paid