Statement of Cash Flows-Indirect Method The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 2041, is as follows: Dec. 31, 2012 Dec. 31, 2011 Assets $ 531,510 $ 570,200 Cash Accounts receivable (net) Inventories 483,670 441,150 733,480 675,020 Prepaid expenses 17,010 20,200 Land 182,840 276,390 845,100 520,880 (223,230) (239,180) 297,650 (81,850) 263,100 (91,950) $2,770,230 $2,451,760 Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Total assets Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Bonds payable Common stock, $20 par Paid-in capital: Excess of issue price over par-common stock Retained earnings Total liabilities and stockholders' equity $ 526,340 $ 555,430 155,130 0 184,000 68,000 439,000 323,000 1,465,760 1,505,330 $2,770,230 $2,451,760 The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 2012 are as follows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 2012 Jan. 1 Balance Apr. 20 Realized $87,000 cash from sale 276,390 93,550 182,840 ACCOUNT Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 2012 520,880 Jan. 1 Balance Apr. 20 Acquired for cash 324,220 845,100 ACCOUNT Accumulated Depreciation-Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 2012 Jan. 1 Balance 223,230 Dec. 31 Depreciation for year 15,950 239,180 ACCOUNT Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 2012 Jan. 1 Balance Jan. 26 Discarded, no salvage Aug. 11 Purchased for cash 263,100 234,200 28,900 63,450 297,650 ACCOUNT Accumulated Depreciation-Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 91,950 28,900 63,050 Jan. 26 Equipment discarded Dec. 31 Depreciation for year 18,800 81,850 ACCOUNT Bonds Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 2012 May 1 Issued 15-year bonds 155,130 155,130 ACCOUNT Common Stock, $20 par ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 68,000 116,000 184,000 Dec. 7 Issued 5,800 shares of common stock for $40 per share ACCOUNT Paid-in Capital in Excess of Par-Common Stock ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 323,000 Jan. 1 Balance Dec. 7 Issued 5,800 shares of common stock for $40 per share 116,000 439,000 ACCOUNT Retained Earnings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 1,505,330 Dec. 31 Net loss 19,050 1,486,280 Dec. 31 Cash dividends 20,520 1,465,760 Required: 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. Whitman Co. Statement of Cash Flows For the Year Ended December 31, 20Y2 Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cashflow from operating activities: Depreciation Loss on sale of land Changes in current operating assets and liabilities: Increase in accounts receivable Increase in inventories Decrease in prepaid expenses O II 1100 QUI Decrease in accounts payable Net cash flow used for operating activities Cash flows from investing activities: Cash received from land sold o Cash paid for acquisition of building Cash paid for purchase of equipment Net cash flow used for investing activities Cash flows from investing activities: Cash received from land sold Cash paid for acquisition of building Cash paid for purchase of equipment o Net cash flow used for investing activities Cash flows from financing activities: Cash received from issuance of bonds payable Cash received from issuance of common stock Cash paid for dividends Net cash flow from financing activities Change in cash Cash at the beginning of the year Cash at the end of the year
