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The comparative balance sheet of Orange Angel Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: 1 Dec. 31, 20Y8 Dec. 31, 20Y7

The comparative balance sheet of Orange Angel Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:

1

Dec. 31, 20Y8

Dec. 31, 20Y7

2

Assets

3

Cash

$147,270.00

$180,220.00

4

Accounts receivable (net)

224,490.00

241,070.00

5

Merchandise inventory

321,930.00

299,210.00

6

Prepaid expenses

13,120.00

9,890.00

7

Equipment

655,170.00

536,180.00

8

Accumulated depreciation-equipment

(171,750.00)

(131,210.00)

9

Total assets

$1,190,230.00

$1,135,360.00

10

Liabilities and Stockholders Equity

11

Accounts payable (merchandise creditors)

$249,380.00

$237,500.00

12

Mortgage note payable

0.00

336,240.00

13

Common stock, $10 par

73,000.00

23,000.00

14

Excess of paid-in capital over par

460,000.00

310,000.00

15

Retained earnings

407,850.00

228,620.00

16

Total liabilities and stockholders equity

$1,190,230.00

$1,135,360.00

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:

a. Net income, $332,260.
b. Depreciation reported on the income statement, $84,950.
c. Equipment was purchased at a cost of $163,400, and fully depreciated equipment costing $44,410 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. 10,000 shares of common stock were issued at $20 for cash.
f. Cash dividends declared and paid, $153,030.

Required:

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.

Labels and Amount Descriptions

Labels
December 31, 20Y8
For the Year Ended December 31, 20Y8
Amount Descriptions
Cash paid for equipment
Cash received from issuing common stock
Cash dividends
Cash paid to retire mortgage note payable
Decrease in merchandise inventory
Decrease in accounts payable
Decrease in accounts receivable
Decrease in prepaid expenses
Depreciation
Increase in accounts payable
Increase in accounts receivable
Increase in merchandise inventory
Increase in prepaid expenses
Net increase in cash
Net decrease in cash
Net cash flows from financing activities
Net cash flows from investing activities
Net cash flows from operating activities
Net cash flows used for financing activities
Net cash flows used for investing activities
Net cash flows used for operating activities
Net income
Net loss

Statement of Cash Flows

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.

Orange Angel Enterprises 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

Changes in current operating assets and liabilities:

6

7

8

9

10

11

Cash flows from (used for) investing activities:

12

13

14

Cash flows from (used for) financing activities:

15

16

17

18

19

20

Cash balance, January 1, 20Y8

21

Cash balance, December 31, 20Y8

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