Statement of Cash Flows--Indirect Method The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 2018 and 2017, is as follows: Dec. 31, 2018 Dec. 31, 2017 Assets Cash $52,310 $63,900 Accounts receivable (net) 80,380 86,150 Inventories 114,830 106,780 Prepaid expenses 4,680 3,240 Equipment 233,910 191,300 Accumulated depreciation equipment (60,820) (46,920) Total assets $425,290 $404,450 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $89,310 $84,530 Mortgage note payable 0 121,340 Common stock, $1 par 13,000 8,000 Paid-in capital in excess of par-common stock 199,000 114,000 Retained earnings 123,980 Total liabilities and stockholders' equity $425,290 $404,450 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2018 are as follows: a. Net Income, $121,340. b. Depreciation reported on the income statement, $29,780. c. Equipment was purchased at a cost of $58,490 and fully depreciated equipment costing $15,880 was discarded, with no salvage realized. d. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty 76,580 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2078 are as follows: a. Net Income, $121,340 b. Depreciation reported on the income statement, $29,780. c Equipment was purchased at a cost of $58,490 and fully deprecated equipment costing $15,880 was discarded, with no salvage realized, d. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty e. 5,000 shares of common stock were issued at $18 for cash. 1. Cash dividends declared and paid $73,940, 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 outflows, cash payments, decreases in cash, or any negative adjustments. Yellow Dog Enterprises Inc. Statement of Cash Flows For the Year Ended December 31, 2018 Cash flows from (used for) operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Decrease in accounts receivable Increase in inventories Increase in prepaid expenses Increase in accounts payable 1000 0 o Net cash flow from operating activities Cash flows from (used for) investing activities: Cash paid for equipment For the Year Ended December 31, 2048 Cash flows from (used for) operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Decrease in accounts receivable Increase in inventories 1000 Increase in prepaid expenses Increase in accounts payable Net cash flow from operating activities Cash flows from (used for) investing activities: Cash paid for equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash received from sale of common stock Cash paid for dividends Cash paid to retire mortgage note payable Net cash flow used for financing activities Net decrease in cash Ludo Cash balance, January 1, 20Y8 Cash balance, December 31, 2048
