Prepare a statement of cash flows in the correct format for the year 2012. Divid
ID: 2419246 • Letter: P
Question
Prepare a statement of cash flows in the correct format for the year 2012. Dividends paid in the year 2012 were:
Preferred stock $15,000
Common stock $17,000
Balance Sheet December 31, 2011 & December 31, 2012 2011 2012 Cash Accounts Inventory Prepaid Expenses Total Current Assets Gross Plant & Equipment Accumulated Depreciation Net Plant 8 Equipment $ 89,000 64,000 112,000 10,000 275,000 238,000 (40,000) 198,000 $ 100,000 70,000 100,000 10,000 280,000 311,000 (66,000) 245,000 $473,000 525,000 Receivable Total assets Accounts Payable Accrued Expenses Total Current Debt Bonds Payable Preferred Stock Common Stock Retained Earnings $ 85,000 68,000 153,000 70,000 0 205,000 45,000 $ 90,000 63,000 153,000 0 120,000 205,000 47,000 $ 525,000 Total Liabilities & EquityExplanation / Answer
cash flow statement for the year 2012
cash flow from operating activities
Net income 34000
Add: depreciation[66000 - 40000] 26000
less:increase in accounts receivable (6000)
add: decrease in inventory 12000
add: increase in accounts payable 5000
less: decrease in accrued expense (5000)
net inflow cash generated from operating activity $66000
cash flow from investing activities
purchase of gross plant and equipment (73000)
[311000 - 238000]
net cash inflow used in investing activity ($73000)
cash flow from Financing activities
common stock dividend (17000)
preferred stock dividend (15000)
payment of Bond payable (70000)
issuance of preferred stock 120000
net cash inflow generated from financial activity $18000
net increase in cash and cash equivalent $11000
add: cash and cash equivalent in beginning $89000
cash and cash equivalent at Ending $100000
Note:-
Net income = Ending balance of Retained Earning + dividend paid - opening balance of retained earning
= 47000 + (15000 + 17000) - 45000
= 47000 + 32000 - 45000
= $34000