Question
The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows: 1 Dec. 31, 20Y2 Dec. 31, 20Y1 2
The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:
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| Dec. 31, 20Y2 | Dec. 31, 20Y1 |
2 | Assets |
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3 | Cash | $183.00 | $14.00 |
4 | Accounts receivable (net) | 55.00 | 49.00 |
5 | Inventories | 117.00 | 99.00 |
6 | Land | 250.00 | 330.00 |
7 | Equipment | 205.00 | 175.00 |
8 | Accumulated depreciation-equipment | (68.00) | (42.00) |
9 | Total assets | $742.00 | $625.00 |
10 | Liabilities and Stockholders Equity |
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11 | Accounts payable (merchandise creditors) | $51.00 | $37.00 |
12 | Dividends payable | 5.00 |
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13 | Common stock, $1 par | 125.00 | 80.00 |
14 | Paid-in capital: Excess of issue price over parcommon stock | 85.00 | 70.00 |
15 | Retained earnings | 476.00 | 438.00 |
16 | Total liabilities and stockholders equity | $742.00 | $625.00 |
The following additional information is taken from the records:
1. | Land was sold for $120. |
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 $62 credit to Retained Earnings for net income. |
6. | There was an $24 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 operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required. |
B. | Was the net cash flow from operations for Olson-Jones Industries Inc. more or less than net income? What is the source of this difference? |
Score: 145/154
Olson-Jones Industries Inc. |
Statement of Cash Flows |
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1 | Cash flows from operating activities: |
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3 | Adjustments to reconcile net income to net cash flow from operating activities: |
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6 | Changes in current operating assets and liabilities: |
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11 | Cash flows from (used for) investing activities: |
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15 | Cash flows from (used for) financing activities: |
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20 | Cash at the beginning of the year |
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21 | Cash at the end of the year |
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