Preparing a Statement of Cash Flows(Indirect Format) Reuben Corporation has comp
ID: 2457616 • Letter: P
Question
Preparing a Statement of Cash Flows(Indirect Format)
Reuben Corporation has completed its comparative balancesheet and income statement, shown at the top of the following page,at year-end 2007.
Additional information:
1. A payment of $8,250 was made on the loan principal duringthe year.
2. Just before year-end, a dividend was distributed tostockholders.
3. A parcel of land was acquired early in theyear.
4. New shares of common stock were sold during theyear.
Required: Prepare a statement of cash flows in good formusing the indirect format.
Explanation / Answer
CashFlow Statement
CashFlow Statement
Decrease in PrepaidAdvertising 300.00 Decrease in TaxesPayable (400.00) 9,200.00 Less : Dividendsdeclared & paid (1,700.00) CashProfits 7,500.00 Decrease in AccountsReceivable 1,200.00 Increase ininventory (1,600.00) Cash used up byoperating activities (400.00) Sale of CommonStock 6,000.00 Repayment ofLoan (8,250.00) Cash used up byFinancing activities (2,250.00) Cash used up byinvesting activities (4,000.00) ( Purchase ofLand ) Cash Balance atthe end 850.00