The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Dec. 31, 20Y8 Dec. 31, 20Y7 Assets Cash $74,070 $90,960 Accounts receivable (net) 113,810 122,620 Inventories 162,590 151,970 Prepaid expenses 6,620 4,610 Equipment 331,200 272,300 Accumulated depreciation-equipment (86,110) (66,780) Total assets $602,180 $575,680 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $126,460 $120,320 Mortgage note payable 0 172,700 Common stock, $1 par 19,000 12,000 Paid-in capital: Excess of issue price over par-common stock 295,000 162,000 Retained earnings 161,720 108,660 Total liabilities and stockholders equity $602,180 $575,680
Statement of Cash Flows-Indirect Method The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 2048 and 2017, is as follows: Dec. 31, 2018 Dec. 31, 2017 Assets Cash $90,960 $74,070 113,810 Accounts receivable (net) 122,620 Inventories 162,590 151,970 Prepaid expenses 6,620 4,610 Equipment 331,200 272,300 Accumulated depreciation-equipment (86,110) (66,780) Total assets $602,180 $575,680 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Mortgage note payable $126,460 $120,320 0 172,700 Common stock, $1 par 19,000 12,000 Paid-in capital: Excess of issue price over par-common stock 295,000 162,000 Retained earnings 161,720 108,660 Total liabilities and stockholders' equity $602,180 $575,680 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, $135,830. b. Depreciation reported on the income statement, $41,930. C. Equipment was purchased at a cost of $81,500, and fully depreciated equipment costing $22,600 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. 7,000 shares of common stock were issued at $20 for cash. f. Cash dividends declared and paid, $82,770. Required: Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Yellow Dog Enterprises Inc. Statement of Cash Flows For the Year Ended December 31, 20Y8 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Decrease in accounts receivable 001 II Increase in inventory Decrease in accounts payable Decrease in prepaid expenses For the Year Ended December 31, 20Y8 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Changes in current operating assets and liabilities: Decrease in accounts receivable Increase in inventory Decrease in accounts payable Decrease in prepaid expenses Net cash flow from operating activities Cash flows from investing activities: Net cash flow used for investing activities Cash flows from financing activities: Net cash flow used for financing activities Cash at the beginning of the year Cash at the end of the year
