Statement of Cash Flows

The following are several items involving the cash flow activities of the ROCKY HORROR PICTURE CO. for 2013:

1. Net income, $53,500
2. Payment of dividends, $16,400
3. Ten-year, $35,500 bonds payable were issued at face value
4. Depreciation expense, $13,100
5. Building was acquired at a cost of $36,700
6. Accounts receivable decreased by $3,300
7. Accounts payable decreased by $5,000
8. Equipment was acquired at a cost of $7,200
9. Inventories increased by $7,000
10. Beginning cash balance, $24,600

Required:

Hide

Prepare Rocky Horror Picture's statement of cash flows for 2013 using the indirect method. Use a minus sign for any negative amounts.

ROCKY HORROR PICTURE CO.
Statement of Cash Flows
For Year Ended December 31, 2013
Net Cash Flow From Operating Activities
Less: Decrease in accounts payable Add: Increase in inventories Less: Decrease in accounts receivable Cash, January 1, 2013 Less: Increase in inventories Net income Cash, December 31, 2013 Less: Depreciation expense Payment for purchase of building Add: Decrease in accounts payable Correct 5	$ Correct 6
Adjustments for differences between income flows and cash flows from operating activities:
Add: Increase in inventories Payment of dividends Less: Decrease in accounts receivable Receipt from issuance of bonds Payment for purchase of equipment Payment for purchase of building Add: Decrease in accounts payable Less: Depreciation expense Net income Add: Depreciation expense Correct 8	Correct 9
Less: Decrease in accounts receivable Less: Depreciation expense Receipt from issuance of bonds Add: Decrease in accounts receivable Payment of dividends Net income Add: Decrease in accounts payable Add: Increase in inventories Cash, January 1, 2013 Cash, December 31, 2013 Correct 10	Correct 11
Add: Increase in inventories Payment of dividends Payment for purchase of equipment Payment for purchase of building Add: Decrease in accounts payable Less: Increase in inventories Receipt from issuance of bonds Less: Decrease in accounts receivable Net income Less: Depreciation expense Correct 12	Correct 13
Payment for purchase of building Payment for purchase of equipment Less: Decrease in accounts payable Net income Less: Decrease in accounts receivable Cash, January 1, 2013 Less: Depreciation expense Payment of dividends Receipt from issuance of bonds Cash, December 31, 2013 Correct 14	Correct 15
Net cash provided by operating activities	$ Correct 17
Cash Flows From Investing Activities
Net income Less: Increase in inventories Add: Increase in inventories Add: Depreciation expense Add: Decrease in accounts receivable Payment for purchase of building Less: Decrease in accounts payable Add: Decrease in accounts payable Less: Decrease in accounts receivable Less: Depreciation expense Correct 19	$ Correct 20
Less: Decrease in accounts payable Less: Increase in inventories Receipt from issuance of bonds Cash, January 1, 2013 Add: Decrease in accounts payable Net income Payment of dividends Add: Increase in inventories Payment for purchase of equipment Cash, December 31, 2013 Correct 21	Correct 22
Net cash used for investing activities	Correct 24
Cash Flows From Financing Activities
Add: Depreciation expense Payment for purchase of building Add: Increase in inventories Add: Decrease in accounts payable Add: Decrease in accounts receivable Payment of dividends Cash, January 1, 2013 Cash, December 31, 2013 Payment for purchase of equipment Net income Correct 26	$ Correct 27
Cash, December 31, 2013 Receipt from issuance of bonds Add: Decrease in accounts receivable Payment for purchase of building Net income Less: Depreciation expense Add: Increase in inventories Add: Depreciation expense Less: Increase in inventories Less: Decrease in accounts receivable Correct 28	Correct 29
Net cash provided by financing activities	Correct 31
Net increase in cash Net decrease in cash Correct 32	$ Correct 33
Cash, December 31, 2013 Cash, January 1, 2013 Net increase in cash Net decrease in cash Correct 34	Correct 35
Cash, January 1, 2013 Net decrease in cash Cash, December 31, 2013 Net increase in cash Correct 36	$ Correct 37