ACCT 361 Lecture 1: Statement of Cash Flows
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(Learning Objective 3: Prepare operating cash flowsâindirect method) Eldred Corporation accountants have assembled the following data for the year ended June 30, 2012:
Net income | $ ? |
Payment of dividends | 5,500 |
Proceeds from the issuance of common stock | 15,000 |
Sales revenue | 222,000 |
Increase in current assets other than cash | 32,000 |
Purchase of treasury stock | 8,000 |
Cost of goods sold | $114,000 |
Other operating expenses | 39,000 |
Purchase of equipment | 37,000 |
Increase in current liabilities | 11,000 |
Payment of note payable | 29,000 |
Proceeds from sale of land | 31,000 |
Depreciation expense | 6,000 |
Prepare the operating activities section of Eldredâs statement of cash flows for the year ended June 30, 2012. Eldred uses the indirect method for operating cash flows. PLEASE CHART ON COMPUTER. NO HAND WRITTEN DATA PLEASE! THANK YOU.
Statement of Cash FlowsâIndirect Method
The comparative balance sheet of Mavenir Technologies Inc. for December 31, 2014 and 2013, is shown as follows:
Dec. 31, 2014 | Dec. 31, 2013 | ||||
Assets | |||||
Cash | $246,880 | $232,300 | |||
Accounts receivable (net) | 89,440 | 83,430 | |||
Inventories | 252,460 | 247,030 | |||
Investments | 0 | 95,700 | |||
Land | 129,500 | 0 | |||
Equipment | 278,560 | 218,400 | |||
Accumulated depreciation-equipment | (65,210) | (58,890) | |||
Total | $931,630 | $817,970 | |||
Liabilities and Stockholders' Equity | |||||
Accounts payable (merchandise creditors) | $168,630 | $161,140 | |||
Accrued expenses payable (operating expenses) | 16,770 | 21,270 | |||
Dividends payable | 9,320 | 7,360 | |||
Common stock, $10 par | 50,310 | 40,080 | |||
Paid-in capital in excess of par-common stock | 189,120 | 111,240 | |||
Retained earnings | 497,480 | 476,880 | |||
Total | $931,630 | $817,970 |
The following additional information was taken from the records:
The investments were sold for $111,970 cash.
Equipment and land were acquired for cash.
There were no disposals of equipment during the year.
The common stock was issued for cash.
There was a $59,040 credit to Retained Earnings for net income.
There was a $38,440 debit to Retained Earnings for cash dividends declared.
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 and for any adjustments, if required.
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Statement of Cash FlowsâIndirect Method
The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows:
Dec. 31, 20Y9 | Dec. 31, 20Y8 | ||||
Assets | |||||
Cash | $245,600 | $227,150 | |||
Accounts receivable (net) | 88,970 | 81,580 | |||
Inventories | 251,170 | 241,550 | |||
Investments | 0 | 93,580 | |||
Land | 128,820 | 0 | |||
Equipment | 277,110 | 213,550 | |||
Accumulated depreciationâequipment | (64,880) | (57,590) | |||
Total assets | $926,790 | $799,820 | |||
Liabilities and Stockholders' Equity | |||||
Accounts payable | $167,750 | $157,560 | |||
Accrued expenses payable | 16,680 | 20,800 | |||
Dividends payable | 9,270 | 7,200 | |||
Common stock, $10 par | 50,050 | 39,190 | |||
Paid-in capital: Excess of issue price over par-common stock | 188,140 | 108,780 | |||
Retained earnings | 494,900 | 466,290 | |||
Total liabilities and stockholdersâ equity | $926,790 | $799,820 |
Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:
Equipment and land were acquired for cash.
There were no disposals of equipment during the year.
The investments were sold for $84,220 cash.
The common stock was issued for cash.
There was a $66,200 credit to Retained Earnings for net income.
There was a $37,590 debit to Retained Earnings for cash dividends declared.
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.
Merrick Equipment Co. | ||
Statement of Cash Flows | ||
For the Year Ended December 31, 20Y9 | ||
Cash flows from operating activities: | ||
Net income | $ | |
Adjustments to reconcile net income to net cash flow from operating activities: | ||
Depreciation | ||
Loss on sale of investments | ||
Changes in current operating assets and liabilities: | ||
Increase in accounts receivable | ||
Increase in inventories | ||
Increase in accounts payable | ||
Decrease in accrued expenses payable | ||
Net cash flow from operating activities | $ | |
Cash flows from (used for) investing activities: | ||
Cash from sale of investments | $ | |
Cash used for purchase of land | ||
Cash used for purchase of equipment | ||
Net cash flow used for investing activities | ||
Cash flows from (used for) financing activities: | ||
Cash from sale of common stock | ||
Cash used for dividends | ||
Net cash flow from financing activities | ||
Increase in cash | $ | |
Cash at the beginning of the year | ||
Cash at the end of the year | $ |