Prepare statement of cash flow (indirect method) using balance sheet data. Follo
ID: 2903084 • Letter: P
Question
Prepare statement of cash flow (indirect method) using balance sheet data. Following are comparative balance sheets for Millco, Inc., at January 31 and February 28, 2014:
MILLCO, INC.
Balance Sheets
February 28 and January 31, 2014
February 28
January 31
Assets
Cash
$84,000
$74,000
Accounts receivable
$128,000
$106,000
Merchandise inventory
$162,000
$188,000
Total current assets
$374,000
$368,000
Plant and equipment:
Production equipment
$332,000
$304,000
Less: Accumulated depreciation
($48,000)
($42,000)
Total assets
$658,000
$630,000
Liabilities
Accounts payable
$74,000
$82,000
Short-term debt
$88,000
$88,000
Other accrued liabilities
$42,000
$48,000
Total current liabilities
$204,000
$218,000
Long-term debt
$66,000
$92,000
Total liabilities
$270,000
$310,000
Stockholders
MILLCO, INC.
Balance Sheets
February 28 and January 31, 2014
February 28
January 31
Assets
Cash
$84,000
$74,000
Accounts receivable
$128,000
$106,000
Merchandise inventory
$162,000
$188,000
Total current assets
$374,000
$368,000
Plant and equipment:
Production equipment
$332,000
$304,000
Less: Accumulated depreciation
($48,000)
($42,000)
Total assets
$658,000
$630,000
Liabilities
Accounts payable
$74,000
$82,000
Short-term debt
$88,000
$88,000
Other accrued liabilities
$42,000
$48,000
Total current liabilities
$204,000
$218,000
Long-term debt
$66,000
$92,000
Total liabilities
$270,000
$310,000
Stockholders
Explanation / Answer
Hi,
Please find the detailed answer as follows;
Cash Flow from Operating Activties Amount Net Income 72000 Add Depreciation Expense 6000 Decrease in Inventory (188000