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The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The

The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized.

Current Year

Prior Year

Balance Sheet
Assets
Cash $ 70,500 $ 91,500
Accounts Receivable 100,000 87,500
Merchandise Inventory 75,000 81,250
Property and Equipment 140,000 75,000
Less: Accumulated Depreciation (39,600 ) (20,000 )
Total Assets $ 345,900 $ 315,250
Liabilities:
Accounts Payable $ 12,500 $ 15,000
Salaries and Wages Payable 2,500 1,250
Notes Payable, Long-Term 62,500 75,000
Stockholders Equity:
Common Stock 120,000 100,000
Retained Earnings 148,400 124,000
Total Liabilities and Stockholders Equity $ 345,900 $ 315,250
Income Statement
Sales $ 300,000
Cost of Goods Sold 160,000
Depreciation Expense 19,600
Other Expenses 75,000
Net income $ 45,400

Other information from the companys records includes the following:

  • Bought equipment for cash, $65,000.
  • Paid $12,500 on long-term note payable.
  • Issued new shares of common stock for $20,000 cash.
  • Cash dividends of $21,000 were declared and paid to stockholders.
  • Accounts Payable arose from inventory purchases on credit.
  • Income Tax Expense ($4,000) and Interest Expense ($3,000) were paid in full at the end of both years and are included in Other Expenses.

Required: Prepare a schedule summarizing operating, investing, and financing cash flows using the T-account approach. image text in transcribed

Cash Operating 0 Net cash flow provided by operating activities Investing 0 Net cash flow used in investing activities Financing 0 Net cash flow used by financing activities Net decrease in Cash Beginning Balance, Cash Ending Balance, Cash

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