the following transaction and event occurred during the year. assuming that this

Question

the following transaction and event occurred during the year. assuming that this company uses the indirect method to report cash provided by operating activities indicate where each item would appear on its statement of cash flows : operating activities, investing activities, financing activities, noncash investing and financing for following 1.paid cash for operating expenses 2.issued common stock for cash 3. accounts receivable increased in the year 3. recorded depreciation expense 4. income taxes payable decreased during the year 5. sold equipment for cash, yielding a loss 6. paid cash for interest expense 7. purchased land by issuing common stock 8. purchased long term investment in bonds 9. paid cash for retirement of not payable

Explanation / Answer

2011... 2010 Cash... $65,000... $54,000 Accounts receivable (net)... 78,000... 85,000 Inventories... 106,500... 90,000 Land... ----------- ... 20,000 Equipment ... 495,000... 370,000 Accumulated depreciation... (215,000)... (158,000) $ 529,500... $ 461,000 Accounts payable (merch. credit)... $53,500... $55,000 Common stock, $10 par... 200,000... 170,000 Paid in capital in excess of par- common stock... 62, 000... 60,000 retained earnings... 214,000... 176,000 $ 529,500... $ 461,000 Branch Company Statement of Cash Flows For the Year Ended December 31, 2011 Cash Flows for Operating Activities: Net income $56,000 Items to reconcile net income to cash flows for operating activities Depreciation expense $57,000 Loss on sale of land $5,000 Decrease in accounts receivable $7,000 Increase in inventories ($16,500) Decrease in accounts payable ($1,500) Net cash flows for operating activities $107,000 Cash Flows for Investing Activities: Cash paid for equipment purchased ($125,000) Cash received for land sold $15,000 Net cash flows for investing activities ($110,000) Cash Flows for Financing Activities: Cash received for common stock issued $32,000 Cash paid for dividends ($18,000) Net cash flows for financing activities $14,000 Net Increase in Cash $11,000 Cash balance - January 1 $54,000 Cash balance - December 31 $65,000

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