Prepare the Cash Flows from Operating Activities section of the statement of cas
ID: 2372099 • Letter: P
Question
Prepare the Cash Flows from Operating Activities section of the statement of cash flows using the indirect method for Jones Soda Co. for the year. Interpret your results in part (a) The following additional information is taken from the records Land was sold $75 Equipment was acquired for cash There were no disposals of equipment during the year The common stock was Issued for cash There was a $195 credit to Retained Earnings for net income There was a $60 debit to Retained Earnings for cash dividends declared. Respond to the following: Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Was Hobson Medical Equipment's cash flow from operations more or less than net income? What is the source of this difference?Explanation / Answer
Cash Flow from operations
Net Income 195
Adjustment for non cash effects:
Depreciation Expense 18
Changes in operating assets and liabilities
Increase in accounts receivable (48)
Increase in inventories (39)
Increase in accounts payable 9
Increase in dividends payable 18
Net cash flows from operating activities 153