McKinley Corporation is preparing its annual financial statements at December 31
ID: 2458957 • Letter: M
Question
McKinley Corporation is preparing its annual financial statements at December 31, Year 1. Listed here are the items on its statement of cash flows presented in alphabetical order. Parentheses indicate that a listed amount should be subtracted on the cash flow statement. The beginning balance in cash was $8,325 and the ending balance was $16,650. Prepare the Year 1 statement of cash flows for McKinley Corporation. The section reporting cash flows from operating activities should be prepared using the indirect method.Explanation / Answer
McKinley Corporation Cash Flow Statement for the year ended Dec.31, Year 1 Particulars Amount I Cash Flow from Operating Activities Net Income $8,325 Add: Dec. in Current Assets and Inc. in Current Liabilities Decrease in Inventory $333 $333 Less: Inc. in Current Assets and Dec. in Current Liabilities Increase in Accounts Receivables ($2,997) Decrease in Accounts Payable ($999) ($3,996) Cash Flow from (Used) in Operating Activities $4,662 II Cash Flow from Investing Activities Purchase of Land ($11,988) Purchase of New Truck ($2,331) Cash Flow from (Used) in Investing Activities ($14,319) III Cash Flow from Financing Activities Stock Issued in Cash $7,992 Cash Borrowed on three Year Note $9,990 Cash Flow from (Used) in Financing Activities $17,982 Net Inc. / dec. in Cash & Cash Equivalants (I+II+III) $8,325 Add: Cash at the Beginning of the Year $8,325 Cash at the end of the Year $16,650