Problem 16-2A Statement of cash flows—indirect method >> Additional Resources <<

ID: 2346817 • Letter: P

Question

Problem 16-2A
Statement of cash flows—indirect method

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The comparative balance sheet of Amelia Enterprises, Inc. at December 31, 2010 and 2009, is as follows:

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2010 are as follows:
Net income, $126,000.
Depreciation reported on the income statement, $41,700.
Equipment was purchased at a cost of $81,400, and fully depreciated equipment costing $22,400 was discarded, with no salvage realized.
The mortgage note payable was not due until 2013, but the terms permitted earlier payment without penalty.
7,000 shares of common stock were issued at $20 for cash.
Cash dividends declared and paid, $76,800.
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. If needed, use the minus sign to indicate cash outflows or a decrease i

Explanation / Answer

(In $)

Net Income

Adjustments made

Depreciation

Increase in Inventory

decrease in Account receivable

Increase in Account payable

Increase in prepaid Expenses

Cash Flow From Operating Activity

126000

41700

(11200)

8700

6300

(1900)

169600