Statement of Cash Flows

The following is a list of items for Witts Company's 2016 statement of cash flows:

1. receipt from sale of equipment, $2,700
2. increase in inventory, $3,900
3. net income, $13,500
4. payment for purchase of building, $29,000
5. depreciation expense, $8,700
6. receipt from issuance of bonds, $8,000
7. increase in prepaid expenses, $800
8. loss on sale of equipment, $2,200
9. payment of dividends, $5,200
10. decrease in accounts receivable, $1,700
11. issuance of common stock for land, $6,900
12. decrease in accounts payable, $1,500
13. beginning cash balance, $10,200

Required:

1. Prepare the statement of cash flows. Use a minus sign to indicate cash outflows, a decrease in cash or cash payments.

WITTS COMPANY

Statement of Cash Flows

For Year Ended December 31, 2016

Operating Activities:

• Net income

Adjustment for noncash income items:

• Add: Depreciation expense
• Add: Loss on sale of equipment

Adjustments for cash flow effect from working capital items:

• Decrease in accounts receivable
• Increase in Inventory
• Decrease in prepaid expenses
• Decrease in Accounts Payable
• Net cash provided by operating activities

Investing Activities:

• Receipt from sale of equipment
• Payment for purchase of building
• Net cash used for investing activities

Financing Activities:

• Receipt from issuance of bonds
• Payment of dividends
• Net cash provided by financing activities
• Net decrease in cash

Cash, January 1, 2016

Cash, December 31, 2016