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The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y

ID: 2539471 • Letter: T

Question

The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:

1

Dec. 31, 20Y8

Dec. 31, 20Y7

2

Assets

3

Cash

$145,630.00

$180,110.00

4

Accounts receivable (net)

224,520.00

241,890.00

5

Merchandise inventory

321,860.00

299,730.00

6

Prepaid expenses

12,550.00

10,220.00

7

Equipment

655,090.00

537,200.00

8

Accumulated depreciation-equipment

(170,220.00)

(132,040.00)

9

Total assets

$1,189,430.00

$1,137,110.00

10

Liabilities and Stockholders’ Equity

11

Accounts payable (merchandise creditors)

$250,110.00

$237,190.00

12

Mortgage note payable

0.00

335,380.00

13

Common stock, $10 par

75,000.00

25,000.00

14

Paid-in capital: Excess of issue price over par—common stock

460,000.00

320,000.00

15

Retained earnings

404,320.00

219,540.00

16

Total liabilities and stockholders’ equity

$1,189,430.00

$1,137,110.00

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Yellow Dog Enterprises Inc.

Statement of Cash Flows

1

Cash flows from operating activities:

2

3

Adjustments to reconcile net income to net cash flow from operating activities:

4

5

Changes in current operating assets and liabilities:

6

7

8

9

10

11

12

Cash flows from (used for) investing activities:

13

14

15

16

Cash flows from (used for) financing activities:

17

18

19

20

21

22

Cash at the beginning of the year

23

Cash at the end of the year

1

Dec. 31, 20Y8

Dec. 31, 20Y7

2

Assets

3

Cash

$145,630.00

$180,110.00

4

Accounts receivable (net)

224,520.00

241,890.00

5

Merchandise inventory

321,860.00

299,730.00

6

Prepaid expenses

12,550.00

10,220.00

7

Equipment

655,090.00

537,200.00

8

Accumulated depreciation-equipment

(170,220.00)

(132,040.00)

9

Total assets

$1,189,430.00

$1,137,110.00

10

Liabilities and Stockholders’ Equity

11

Accounts payable (merchandise creditors)

$250,110.00

$237,190.00

12

Mortgage note payable

0.00

335,380.00

13

Common stock, $10 par

75,000.00

25,000.00

14

Paid-in capital: Excess of issue price over par—common stock

460,000.00

320,000.00

15

Retained earnings

404,320.00

219,540.00

16

Total liabilities and stockholders’ equity

$1,189,430.00

$1,137,110.00

Explanation / Answer

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CASHFLOW FROM FINANCING ACTIVITIES

CASHFLOW STATEMENT INDIRECT METHOD Particulars Amount NET INCOME $3,39,360.00 ADJUSTMENTS Depreciation $82,730.00 Decrease / (Increase) in Accounts Recievable $17,370.00 Increase / (Decrease) in Accounts Payable $12,920.00 Decrease / (Increase) in Inventories $(22,130.00) Decrease / (Increase) in Prepaid Expenses $(2,330.00) Net Cash Provided by Operating Activities $4,27,920.00 CASHFLOW FROM INVESTING ACTIVITIES Investment in Property, Plant & Equipment $(1,62,440.00) Net Cash Provided by Investing Activities $(1,62,440.00)

CASHFLOW FROM FINANCING ACTIVITIES

Proceeds from Issue of Share Capital $1,90,000.00 Dividend Paid $(1,54,580.00) Repayment of Bank Losn $(3,35,380.00) Stock Based Compensation $-    Net Cash Provided by Financing Activities $(2,99,960.00) Net changes in Cash $(34,480.00) Beginning Cash Balance $1,80,110.00 Ending Cash Balance $1,45,630.00