1. 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 Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:

   		Dec. 31, 20Y2		Dec. 31, 20Y1
   Assets
   Cash		$190		$60
   Accounts receivable (net)		109		75
   Inventories		68		41
   Land		156		170
   Equipment		87		65
   Accumulated depreciation-equipment		(23)		(12)
   	Total Assets	$587		$399
   Liabilities and Stockholders' Equity
   Accounts payable (merchandise creditors)		$74		$60
   Dividends payable		12		-
   Common stock, $10 par		39		19
   Paid-in capital: Excess of issue price over parcommon stock		102		47
   Retained earnings		360		273
   	Total liabilities and stockholders' equity	$587		$399

   The following additional information is taken from the records:

   1. Land was sold for $35.
   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 $126 credit to Retained Earnings for net income.
   6. There was a $39 debit to Retained Earnings for cash dividends declared.

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

   Olson-Jones Industries, Inc.
   Statement of Cash Flows
   For the Year Ended December 31, 20Y2
   Cash flows from operating activities:
   Cash received from sale of common stock Decrease in accounts receivable Increase in inventories Net income	$
   Adjustments to reconcile net income to net cash flow from operating activities:
   Decrease in accounts receivable Depreciation Increase in accounts receivable Loss on sale of land
   Decrease in inventories Gain on sale of land Increase in accounts payable Loss on sale of land
   Changes in current operating assets and liabilities:
   Decrease in accounts receivable Decrease in inventories Depreciation Increase in accounts receivable
   Decrease in accounts payable Decrease in accounts receivable Decrease in inventories Increase in inventories
   Cash paid for dividends Decrease in accounts payable Depreciation Increase in accounts payable
   Net cash flow from operating activities		$
   Cash flows from investing activities:
   Cash paid for dividends Cash received from sale of land Depreciation Gain on sale of land	$
   Cash paid for purchase of equipment Cash received from sale of common stock Depreciation Increase in inventories
   Net cash flow provided by investing activities
   Cash flows from financing activities:
   Cash received from sale of common stock Cash received from sale of land Decrease in accounts payable Depreciation	$
   Cash paid for dividends Cash received from sale of land Decrease in inventories Increase in accounts receivable
   Net cash flow provided by financing activities
   Cash paid for dividends Change in cash Decrease in accounts payable Increase in accounts payable		$
   Cash at the beginning of the year
   Cash at the end of the year		$

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   b. Was Olson-Joness net cash flow from operations more or less than net income?

   • Less
   • More

   The source(s) of the difference are:

   1. Gain on the sale of land
   2. Purchase of equipment
   3. Sale of common stock
   4. Changes in current operating assets and liabilities
   5. Depreciation expense
   6. Dividends paid