Question
Statement of Cash FlowsA method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past
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Statement of Cash FlowsA method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments.Indirect Method
The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:
Dec. 31, 20Y8 Dec. 31, 20Y7 Assets Cash $74,970 $91,680 Accounts receivable (net) 115,190 123,590 Merchandise inventory 164,570 153,180 Prepaid expenses 6,700 4,640 Equipment 335,220 274,450 Accumulated depreciation-equipment (87,160) (67,310) Total assets $609,490 $580,230 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $127,990 $121,270 Mortgage note payable 0 174,070 Common stock, $1 par 19,000 12,000 Paid-in capital: Excess of issue price over par-common stock 283,000 164,000 Retained earnings 179,500 108,890 Total liabilities and stockholders equity $609,490 $580,230 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:
- Net income, $180,760.
- Depreciation reported on the income statement, $42,630.
- Equipment was purchased at a cost of $83,550, and fully depreciated equipment costing $22,780 was discarded, with no salvage realized.
- The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
- 7,000 shares of common stock were issued at $18 for cash.
- Cash dividends declared and paid, $110,150.
Required:
Prepare a statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
Yellow Dog Enterprises Inc. Statement of Cash Flows For the Year Ended December 31, 20Y8 Cash flows from operating activities: Net income - Common stock
- Depreciation expense
- Inventory
- Net income
- Prepaid expenses
- Retained earnings
$ 180,760
Adjustments to reconcile net income to net cash flow from operating activities: Depreciation expense - Cash used for dividends
- Decrease in accounts receivable
- Depreciation expense
- Increase in accounts receivable
- Net income
- Retained earnings
42,630
Changes in current operating assets and liabilities: Decrease in accounts receivable - Decrease in accounts payable
- Decrease in accounts receivable
- Decrease in inventory
- Depreciation expense
- Increase in accounts receivable
- Decrease in accounts payable
- Decrease in merchandise inventory
- Decrease in prepaid expenses
- Depreciation expense
- Increase in accounts receivable
- Increase in merchandise inventory
- Decrease in accounts payable
- Decrease in inventory
- Decrease in prepaid expenses
- Increase in prepaid expenses
- Decrease in accounts payable
- Decrease in prepaid expenses
- Depreciation expense
- Increase in accounts payable
- Net income
- Retained earnings
Net cash flow from operating activities $ Cash flows from (used for) investing activities: - Cash paid for common stock
- Cash used for equipment
- Cash used for dividends
- Cash paid for merchandise inventory
- Cash paid for prepaid expenses
- Cash paid to retire mortgage note
$ Net cash flow used for investing activities Cash flows from (used for) financing activities: - Cash received from customers
- Cash received from depreciation
- Cash received from dividends
- Cash received from net income
- Cash received from retained earnings
- Cash from sale of common stock
$ - Cash paid for accounts payable
- Cash paid for common stock
- Cash used for dividends
- Cash used for equipment
- Cash paid for inventory
- Cash paid for prepaid expenses
- Cash paid for accounts payable
- Cash paid for accumulated depreciation
- Cash paid for common stock
- Cash paid for depreciation
- Cash paid for inventories
- Cash used to retire mortgage note payable
Net cash flow used for financing activities - Decrease in cash
- Increase in cash
$ Cash at the beginning of the year Cash at the end of the year $
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