Question
Statement of Cash FlowsIndirect Method The following balances are available for Chrisman Company: December 31 2016 2015 Cash $8,000 $10,000 Accounts receivable 20,000 15,000 Inventory
Statement of Cash FlowsIndirect Method
The following balances are available for Chrisman Company:
| December 31 | ||
| 2016 |
| 2015 |
Cash | $8,000 |
| $10,000 |
Accounts receivable | 20,000 |
| 15,000 |
Inventory | 15,000 |
| 25,000 |
Prepaid rent | 9,000 |
| 6,000 |
Land | 75,000 |
| 75,000 |
Plant and equipment | 400,000 |
| 300,000 |
Accumulated depreciation | (65,000) |
| (30,000) |
Totals | $462,000 |
| $401,000 |
|
|
|
|
Accounts payable | $12,000 |
| $10,000 |
Income taxes payable | 3,000 |
| 5,000 |
Short-term notes payable | 35,000 |
| 25,000 |
Bonds payable | 75,000 |
| 100,000 |
Common stock | 200,000 |
| 150,000 |
Retained earnings | 137,000 |
| 111,000 |
Totals | $462,000 |
| $401,000 |
Bonds were retired during 2016 at face value, plant and equipment were acquired for cash, and common stock was issued for cash. Depreciation expense for the year was $35,000. Net income was reported at $26,000.
Required:
1. Prepare a statement of cash flows for 2016 using the indirect method in the Operating Activities section. Use the minus sign to indicate cash payments, cash outflows, or decreases in cash.
Chrisman Company
Statement of cash flows
For the year ended in December 31, 2016
Cash Flows from Operating Activities
______________ $
Adjustments to reconcile net income to net cash provided by operating activities:
______________ $
______________ $
______________ $
______________ $
______________ $
______________ $ (net cash Provided or Used by operation activities)
Cash Flows from Investing Activities
______________ $
Cash Flows from Financing Activities
______________ $
______________ $
______________ $
______________ $ (net cash provided by finance activities or net cash used in finance activities)
______________ $ (net Increase or Decrease in cash)
Cash balance, December 31, 2015 $
Cash balance, December 31, 2016 $
2. Based on the statement of cash flows, was Chrisman cash flow enough for his investment activities? If not explain?
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