tatement of Cash Flows

Roberts Company provided the following partial comparative balance sheets and the income statement for 20X2.

Roberts Company
Comparative Balance Sheets
At December 31, 20X1 and 20X2
		20X1		20X2
Current assets:
Cash		$165,000		$380,000
Accounts receivable		375,000		291,250
Inventories		150,000		160,000
Long-Term Assets:
Plant and equipment		1,100,000		1,075,000
Accumulated depreciation		(600,000)		(635,000)
Land		500,000		718,750
Total assets		$1,690,000		$1,990,000
Liabilities and stockholders equity:
Wages payable		$350,000		$257,500
Bonds payable				192,500
Mortgage payable		50,000
Common stock		187,500		187,500
Paid-in-capital in excess of par		190,000		190,000
Retained earnings		912,500		1,162,500
Total liabilities and stockholders equity		$1,690,000		$1,990,000

Roberts Company
Income Statement
For the Year Ended December 31, 20X2
Revenues		$1,500,000
Gain on sale of equipment		50,000
Cost of goods sold		(960,000)
Depreciation expense		(135,000)
Interest expense		(5,000)
Net income		$450,000

During the year, Roberts Company sold equipment with a book value of $140,000 for $190,000 (original purchase cost of $240,000). New equipment was purchased.

1. Prepare a statement of cash flows for Roberts Company for 20X2. Use a minus sign to indicate a cash outflow.

Roberts Company Statement of Cash Flows For the Year Ended December 31, 20X2

Cash flows from operating activities:
Net incomeNet loss	$- Select -
Add (deduct) adjusting items:
Accounts payableAdvertising expenseCashDecrease in accounts receivableIncrease in accounts receivable	- Select -
Accounts payableAdvertising expenseCashDecrease in wages payableIncrease in wages payable	- Select -
Accounts payableAdvertising expenseCashDecrease in inventoriesIncrease in inventories	- Select -
Accounts payableAdvertising expenseCashDepreciation expenseOperating expense	- Select -
Gain on sale of equipmentLoss on sale of equipment	- Select -
Net cash from operating activities		$fill in the blank 4c5d07014078037_13
Cash flows from investing activities:
DividendsIncome taxesOffice equipmentOffice suppliesSale of equipment	$- Select -
DividendsIncome taxesOffice equipmentPurchase of equipmentRent expense	- Select -
DividendsIncome taxesOffice equipmentPurchase of landRent expense	- Select -
Net cash from investing activities		fill in the blank 4c5d07014078037_20
Cash flows from financing activities:
Cash Short and OverInterest revenueIssuance of bonds payableNotes receivableWork in Process	$- Select -
Cash Short and OverInterest revenueNotes receivablePayment of mortgageWork in Process	- Select -
Cash Short and OverInterest revenueNotes receivablePayment of dividendsWork in Process	- Select -
Net cash from financing activities		fill in the blank 4c5d07014078037_27
Net increase in cash		$fill in the blank 4c5d07014078037_28

2. Based on the above analysis, which of the following is correct?

1. The sum of the operating, investing, and financing cash flows must equal the change in cash from 20X1 to 20X2
2. The operating cash flow must be greater than the change in cash from 20X1 to 20X2.
3. The sum of the operating, investing, and financing cash flows must greater the change in cash from 20X1 to 20X2.
4. The sum of the operating and financing cash flows must equal the change in cash from 20X1 to 20X2.

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