The comparative balance sheet of Hirayama Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:

1		Dec. 31, 20Y2	Dec. 31, 20Y1
2	Assets
3	Cash	$485.00	$163.00
4	Accounts receivable (net)	285.00	198.00
5	Inventories	170.00	112.00
6	Land	395.00	454.00
7	Equipment	220.00	180.00
8	Accumulated depreciation-equipment	(58.00)	(32.00)
9	Total assets	$1,497.00	$1,075.00
10	Liabilities and Stockholders Equity
11	Accounts payable (merchandise creditors)	$174.00	$155.00
12	Dividends payable	28.00
13	Common stock, $1 par	105.00	48.00
14	Excess of paid-in capital over par	245.00	123.00
15	Retained earnings	945.00	749.00
16	Total liabilities and stockholders equity	$1,497.00	$1,075.00

The following additional information is taken from the records:

1.	Land was sold for $123.
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 $294 credit to Retained Earnings for net income.
6.	There was a $98 debit to Retained Earnings for cash dividends declared.

Required:

a.

Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required.

b.

Was Hirayama Industries Inc.s net cash flows from operations more or less than net income? What is the source of this difference?

Labels
December 31, 20Y2
For the Year Ended December 31, 20Y2
Amount Descriptions
Amortization of intangible assets
Cash received from sale of land
Cash paid for purchase of equipment
Cash received from issuing common stock
Cash dividends
Decrease in accounts payable
Decrease in accounts receivable
Decrease in inventories
Depreciation
Gain on sale of land
Increase in accounts payable
Increase in accounts receivable
Increase in inventories
Loss on sale of land
Net increase in cash
Net decrease in cash
Net cash flows from operating activities
Net cash flows used for operating activities
Net cash flows from investing activities
Net cash flows used for investing activities
Net cash flows from financing activities
Net cash flows used for financing activities
Net income
Net loss

a. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required.

Hirayama Industries Inc.

Statement of Cash Flows

1	Cash flows from (used for) operating activities:
2
3	Adjustments to reconcile net income to net cash flows from (used for) operating activities:
4
5
6	Changes in current operating assets and liabilities:
7
8
9
10
11	Cash flows from (used for) investing activities:
12
13
14
15	Cash flows from (used for) financing activities:
16
17
18
19
20	Cash balance, January 1, 20Y2
21	Cash balance, December 31, 20Y2

b. Was Hirayama Industries Inc.s net cash flows from operations more or less than net income? What is the source of this difference?

Net cash flow from operations was than net income.

The source(s) of the difference are: Check all that apply.

Purchase of equipment
Depreciation expense
Sale of common stock
Gain on the sale of land
Dividends paid
Changes in current operating assets and liabilities