Statement of Cash Flows

The comparative balance sheet of Hirayama Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:

	Dec. 31, 20Y2	Dec. 31, 20Y1
Assets
Cash	$200		$67
Accounts receivable (net)	114		83
Inventories	72		46
Land	164		188
Equipment	92		73
Accumulated depreciation-equipment	(25)		(13)
	Total Assets	$617		$444
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$78		$67
Dividends payable	12		-
Common stock, $1 par	41		21
Excess of paid-in capital over par	90		52
Retained earnings	396		304
	Total liabilities and stockholders' equity	$617		$444

The following additional information is taken from the records:

1. Land was sold for $60.
2. Equipment was acquired for cash.
3. There were no disposals of equipment during the year.
4. The common stock was issued for cash.
5. There was a $133 credit to Retained Earnings for net income.
6. There was a $41 debit to Retained Earnings for cash dividends declared.

Question Content Area

a. Explain a statement of cash flows, using the indirect method of presenting Cash flows from (used for) operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Cash flows from (used for) operating activities:
Cash; received from sale of common stock; Decrease in accounts receivable; Increase in inventories; Net income; Net loss	$Net income
Adjustments to reconcile net income to net cash flows from (used for) operating activities:
Decrease in accounts receivable; Depreciation; Gain on sale of land; Increase in accounts receivable; Loss on sale of land	Depreciation
Cash dividends; Decrease in inventories; Gain on sale of land; Increase in accounts payable; Loss on sale of land	Gain on sale of land
Changes in current operating assets and liabilities:
Decrease in accounts receivable Decrease in inventories Depreciation Increase in accounts receivable Net income	- Select -
Decrease in accounts payable Decrease in accounts receivable Decrease in inventories Increase in inventories Net income	- Select -
Cash paid for dividends Decrease in accounts payable DepreciationIncrease in accounts payable Net income	- Select -
Net cash flow from operating activities		$fill in the blank
Cash flows from (used for) investing activities:
Cash paid for dividends Cash received from sale of land Depreciation Gain on sale of landIncrease in accounts receivable	$- Select -
Cash paid for purchase of equipment Decrease in accounts receivable DepreciationIncrease in accounts payable Increase in inventories	- Select -
Net cash flow from investing activities		fill in the blank
Cash flows from (used for) financing activities:
Cash received from issuing common stock Cash received from sale of land Decrease in accounts payable DepreciationNet income	$- Select -
Cash dividends Cash received from sale of land Decrease in inventories Gain on sale of landIncrease in accounts receivable	- Select -
Net cash flows from financing activities		fill in the blank
Depreciation Net decrease in cash Net income Net increase in cash Net loss		$- Select -
Cash balance, January 1, 20Y2		fill in the blank
Cash balance, December 31, 20Y2		$fill in the blank

Question Content Area

b. Was Hirayama Industries Inc.'s net cash flows from operations more or less than net income?

Less or More