Prepare a statement of cash flows, using the indirect method of presenting cash
ID: 2328327 • Letter: P
Question
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.
The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:
The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 20Y2 are as follows:
Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $ 701,950 $ 755,530 Accounts receivable (net) 638,770 582,620 Inventories 968,690 891,480 Prepaid expenses 22,460 26,670 Land 241,470 365,010 Buildings 1,116,100 687,910 Accumulated depreciation-buildings (315,880) (294,820) Equipment 393,090 347,470 Accumulated depreciation-equipment (108,100) (121,440) Total assets $3,658,550 $3,240,430 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $ 695,120 $ 733,540 Bonds payable 204,880 0 Common stock, $20 par 241,000 89,000 Paid-in capital: Excess of issue price over par-common stock 579,000 427,000 Retained earnings 1,938,550 1,990,890 Total liabilities and stockholders' equity $3,658,550 $3,240,430Explanation / Answer
Statement of Cash flows Cash flows from Operating activities: Net loss of the year -25200 Adjustment required Depreciation for equipment 24860 Depreciation on building 21060 Loss on sale of land (123540-114900) 8640 Increase in Accounts receivable -56150 Increase in inventory -77210 Decrease in Prepaid expense 4210 Decrease in Accounts payable -38420 Net cash used n Operating activities -138210 Cashflows from Investing activities Sale of land 114900 Purchase of Building -428190 Purchasse of Equipment -83820 Net cash used in investing activities -397110 Cashflows from Financing activities Issue of Bonds 204880 Issue of Common Stock 304000 Dividend paid -27140 Net cash provided from Financing activities 481740 Net decrease in cash -53580 Beginning balance of cash 755530 Ending balance of cash 701950