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 and AmountDescriptions
Cash paid for dividends
Cash paid for equipment
Cash paid formerchandise
Cash paid for purchase ofequipment
Cash paid for purchase ofland
Cash paid to retire mortgagenote payable
Cash received fromcustomers
Cash received from sale ofcommon stock
Change in cash
December 31, 20Y8
Decrease in inventory
Decrease in accountspayable
Decrease in accountsreceivable
Decrease in prepaidexpenses
Depreciation
For the Year Ended December31, 20Y8
Gain on disposal ofequipment
Gain on sale ofinvestments
Increase in accountspayable
Increase in accountsreceivable
Increase in inventory
Increase in prepaidexpenses
Loss on disposal ofequipment
Loss on sale ofinvestments
Net cash flow from financingactivities
Net cash flow from investingactivities
Net cash flow from operatingactivities
Net cash flow used forfinancing activities
Net cash flow used forinvesting activities
Net cash flow used foroperating activities
Net income
Net loss