Question
Statement of Cash Flows (Indirect Method) Use the following information regarding the Lund Corporation to (a) prepare a statement of cash flows using the indirect
Statement of Cash Flows (Indirect Method) Use the following information regarding the Lund Corporation to (a) prepare a statement of cash flows using the indirect method and (b) compute Lund's operating-cash-flow-to-current-liabilities ratio.
Accounts payable increase $9,900 Accounts receivable increase 4,400 Accrued liabilities decrease 3,300 Amortization expense 6,600 Cash balance, January 1 24,200 Cash balance, December 31 16,500 Cash paid as dividends 31,900 Cash paid to purchase land 99,000 Cash paid to retire bonds payable at par 66,000 Cash received from issuance of common stock 38,500 Cash received from sale of equipment 18,700 Depreciation expense 31,900 Gain on sale of equipment 4,400 Inventory decrease 14,300 Net income 83,600 Prepaid expenses increase 2,200 Average current liabilities 110,000
a. Use negative signs with cash outflow answers.
LUND CORPORATION Statement of Cash Flows For Year Ended December 31 Cash Flow from Operating Activities Net Income $Answer [Correct] Add (deduct) items to convert net income to cash basis Depreciation Answer [Correct] Amortization Answer [Correct] Gain on Sale of Equipment Answer [Incorrect] Accounts Receivable Increase Answer [Incorrect] Inventory Decrease Answer [Correct] Prepaid Expenses Increase Answer [Incorrect] Accounts Payable Increase Answer [Correct] Accrued Liabilities Decrease Answer [Incorrect] Cash Flow Provided by Operating Activities Answer [Correct] Cash Flow from Investing Activities Sale of Equipment Answer [Correct] Purchase of Land Answer [Incorrect] Cash Used by Investing Activities Answer [Incorrect] Cash Flow from Financing Activities Issuance of Common Stock Answer [Correct] Retirement of Bonds Payable Answer [Incorrect] Payment of Dividends Answer [Incorrect] Cash Used by Financing Activities Answer [Incorrect] Net Decrease in Cash Answer [Incorrect] Cash at Beginning of Year Answer [Correct] Cash at End of Year $Answer [Correct]
b. Operating-cash-flow-to-current-liabilities ratio (Round answer to two decimal places.)
Answer [Correct]
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