Prepare a statement of cash flows for the year ended December 31, 2017 using the
ID: 2570452 • Letter: P
Question
Prepare a statement of cash flows for the year ended December 31, 2017 using the indirect method.
BERKLER COMPANY Comparative Balance Sheets ITI Assets Cash Accounts receivable Inventory Prepaid expenses Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment $127,776$ 103,818 93,170 73,205 23,958 191,664 399,300 (79,860 66,550 279,510 (119,790 106,480) $1,024,870 991,595 101,156 69,212 29,282 146,410 399,300 351,384 Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock, $1 par Retained earnings $34,606 46,585 532,400 159,720 252,890 $1,024,870 991,595 465,850 226,270 298,144 Total Additional information 1. Operating expenses include depreciation expense of 2. Land was sold for cash at book value 3. Cash dividends were paid in the amount of 4. Net income for 2017 was 5. Equipment was purchased for cash in the amount of $63,888 $15,972 61,226 $117,128 45,254 $7,986 11,979 In addition, equipment costing with a book value of was sold for cash in the amount of 6. Bonds were converted at face value by issuing 66,550 shares of $1 par value common stock. Instructions Prepare a statement of cash flows for the year ended December 31, 2017 using the © 2016, WileyExplanation / Answer
Berkler Company
Statement of cash flows for the year ended December 31, 2017:
Berkler Company
Cash Flow Statement for the year ended Dec 31, 2017
Cash Flow from Operations:
Net Income
$61,226
Add/Deduct items that impact cash flow:
Depreciation
$63,888
Gain on sale of equipment
($3,993)
Increase in accounts receivable
($7,986)
Decrease in inventory
$3,993
Increase in prepaid expenses
($5,324)
Decrease in accounts payable
($11,979)
Cash Flow from Operations
$99,825
Cash Flow from Investing Activities:
Sale of land
$45,254
Sale of equipment
$11,979
Purchase of equipment
($117,128)
Cash Flow from Investing Activities
($59,895)
Cash Flow from Financing Activities:
Dividends paid
($15,972)
Cash Flow from Financing Activities
($15,972)
Net Increase in Cash
$23,958
Beginning Cash Balance
$103,818
Ending Cash Balance
$127,776
Notes:
= $11,979 - $7,986 = $3,993
= $191,664 - $146,410 = $45,254
Berkler Company
Cash Flow Statement for the year ended Dec 31, 2017
Cash Flow from Operations:
Net Income
$61,226
Add/Deduct items that impact cash flow:
Depreciation
$63,888
Gain on sale of equipment
($3,993)
Increase in accounts receivable
($7,986)
Decrease in inventory
$3,993
Increase in prepaid expenses
($5,324)
Decrease in accounts payable
($11,979)
Cash Flow from Operations
$99,825
Cash Flow from Investing Activities:
Sale of land
$45,254
Sale of equipment
$11,979
Purchase of equipment
($117,128)
Cash Flow from Investing Activities
($59,895)
Cash Flow from Financing Activities:
Dividends paid
($15,972)
Cash Flow from Financing Activities
($15,972)
Net Increase in Cash
$23,958
Beginning Cash Balance
$103,818
Ending Cash Balance
$127,776