Brecker Inc., a greeting card company, had the following statements prepared as
ID: 2452307 • Letter: B
Question
Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2014. Additional information: Dividends in the amount of $5,876 were declared and paid during 2014. Depreciation expense and amortization expense are included in operating expenses. Ho unrealized gains or losses have occurred on the investments during the year. Equipment that had a cost of $28,300 and was 70% depreciated was sold during 2014. Prepare a statement of cash flows using the Indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or In parenthesis e.g. (15,000).)Explanation / Answer
Brecker Cash flow statement of Cash flow Indirect Method Net income Adjustment to reconcile net income to net 28831 Cash provided by Operating Activities Depreciation expense =35029-(25176-(28300*0.7)) 29663 Amortization of Copyright 3860 Gain on Sale of Equipmnet -2044 Decrease in Inventories 20064 Increase in Wages Payable 4289 Increase in Account payable 4192 Increase in Prepaid rent -1178 Increase in Account Receivable -13056 Decrease in Income tax payable -1964 Net Cash provided by operating Activities 72657 Cash flow from Investing Activities Sales of Equipment 10534 Purchase of Equipment -54350 Purchase of Non trading Investment -16909 Net Cash used by Investing Activities -60725 Cash flow from Finance Activities Principal payment of Shot term Loan -2295 Principal payment of Long term Loan -6716 Dividend Payments -5876 Net Cash used by finance Activities -14887 Net Decrease in cash -2955 Cash , January 2013 8859 cash December 2014 5904