Here are comparative balance sheets for Christensen Company. CHRISTENSEN COMPANY

Question

Here are comparative balance sheets for Christensen Company. CHRISTENSEN COMPANY Comparative Balance Sheets December 31 Assets 2011 2010 Cash $73,240 $22,310 Accounts receivable 85,730 75,170 Inventories 169,920 188,750 Land 75,330 100,090 Equipment 260,490 199,880 Accumulated depreciation (66,500) (31,590) Total $598,210 $554,610 Liabilities and Stockholders' Equity Accounts payable $39,200 $46,020 Bonds payable 149,680 199,690 Common stock ($1 par) 216,410 174,090 Retained earnings 192,920 134,810 Total $598,210 $554,610 Additional information: Net income for 2011 was $102,910. Cash dividends of $44,800 were declared and paid. Bonds payable amounting to $50,010 were redeemed for cash $50,010. Common stock was issued for $42,320 cash. No equipment was sold during 2011 but land was sold at cost. Prepare a statement of cash flows for 2011 using the indirect method. (List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1. If amount decreases cash flow, use either a negative sign preceding the number eg. -45 or parentheses eg (45).) CHRISTENSEN COMPANY Statement of Cash Flows For the Year Ended December 31, 2011 Cash flows from operating activities $ Adjustments to reconcile net income to net cash provided by operating activities $ Net cash by operating activities Cash flows from investing activities Net cash by investing activities Cash flows from financing activities Net cash by financing activities Net in cash Cash at beginning of period Cash at end of period $

Explanation / Answer

Net income $103,000 Adjustments for Depreciation $34,000 Changes in working capital- Increase in Accounts receivable ($9,000) Decrease in Inventories $19,000 Decrease in Accounts payable ($8,000) ..Net cash generated from operating activities $139,000 Investing activities Purchase of equipment ($60,000) Proceeds from sale of land $25,000 ..Net cash used in investing activities ($35,000) Financing activities Proceeds from issuance of common stock $42,000 Redemption of bonds ($50,000) Payment of dividends ($45,000) ..Net cash used in financing activities ($53,000) Net increase in cash & cash equivalents $51,000 CCE at beginning of year $22,000 CCE at end of year $73,000

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