Question

The comparative balance sheet of Yellow Dog Enterprises Inc. atDecember 31, 20Y8 and 20Y7, is as follows:

1		Dec. 31, 20Y8	Dec. 31, 20Y7
2	Assets
3	Cash	$80,000.00	$100,000.00
4	Accounts receivable (net)	275,000.00	300,000.00
5	Inventories	510,000.00	400,000.00
6	Prepaid expenses	15,000.00	10,000.00
7	Equipment	1,070,000.00	750,000.00
8	Accumulated depreciation-equipment	(200,000.00)	(160,000.00)
9	Total assets	$1,750,000.00	$1,400,000.00
10	Liabilities and Stockholders’ Equity
11	Accounts payable (merchandise creditors)	$100,000.00	$90,000.00
12	Mortgage note payable	????0.00	400,000.00
13	Common stock, $10 par	600,000.00	200,000.00
14	Paid-in capital: Excess of issue price over par—common stock	300,000.00	100,000.00
15	Retained earnings	750,000.00	610,000.00
16	Total liabilities and stockholders’ equity	$1,750,000.00	$1,400,000.00

Additional data obtained from the income statement and from anexamination of the accounts in the ledger for 20Y8 are asfollows:

	a. Net income, $190,000.
	b. Depreciation reported on theincome statement, $115,000.
	c. Equipment was purchased at acost of $395,000 and fully depreciated equipment costing $75,000was discarded, with no salvage realized.
	d. The mortgage note payable wasnot due for six years, but the terms permitted earlier paymentwithout penalty.
	e. 40,000 shares of common stockwere issued at $15 for cash.
	f. Cash dividends declared andpaid, $50,000.

Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Refer to theLabels and Amount Descriptions list provided for the exact wordingof the answer choices for text entries. Be sure to complete theheading of the statement. Enter amounts that represent cashoutflows as negative numbers using a minus sign.

Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Refer to theLabels and Amount Descriptions list provided for the exact wordingof the answer choices for text entries. Be sure to complete theheading of the statement. Enter amounts that represent cashoutflows as negative numbers using a minus sign.

Yellow Dog Enterprises Inc.

Statement of Cash Flows

1	Cash flows from operating activities:
2
3	Adjustments to reconcile net income to net cash flow fromoperating activities:
4
5	Changes in current operating assets and liabilities:
6
7
8
9
10
11
12	Cash flows from investing activities:
13
14
15
16	Cash flows from financing activities:
17
18
19
20
21
22	Cash at the beginning of the year
23	Cash at the end of the year

Labels andAmount Descriptions

Cash paid for dividendsCash paid for equipmentCash paid formerchandiseCash paid for purchase of equipmentCash paid forpurchase of landCash paid to retire mortgage note payableCashreceived from customersCash received from sale of commonstockChange in cashDecember 31, 20Y8Decrease in inventoryDecreasein accounts payableDecrease in accounts receivableDecrease inprepaid expensesDepreciationFor the Year Ended December 31,20Y8Gain on disposal of equipmentGain on sale ofinvestmentsIncrease in accounts payableIncrease in accountsreceivableIncrease in inventoryIncrease in prepaid expensesLoss ondisposal of equipmentLoss on sale of investmentsNet cash flow fromfinancing activitiesNet cash flow from investing activitiesNet cashflow from operating activitiesNet cash flow used for financingactivitiesNet cash flow used for investing activitiesNet cash flowused for operating activitiesNet incomeNet loss