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ID: 2384882 • Letter: Y
Question
You may use any of the Additional Resources listed in the drop-down menu above to help you complete this activity, but you are not required to do so. To access each resource, click on its name in the drop-down menu above.The comparative balance sheet of House Construction Co. for June 30, 2010 and 2009, is as follows:
The following additional information was taken from the records of House Construction Co.:
Equipment and land were acquired for cash.
There were no disposals of equipment during the year.
The investments were sold for $54,000 cash.
The common stock was issued for cash.
There was a $79,200 credit to Retained Earnings for net income.
There was a $60,000 debit to Retained Earnings for cash dividends declared.
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. If needed, use the minus sign to indicate cash outflows or a decrease in cash.
HOUSE CONSTRUCTION CO.
Statement of Cash Flows
For the Year Ended June 30, 2010
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash
flow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities
Cash flows from investing activities:
Net cash flow used for investing activities
Cash flows from financing activities:
Net cash flow provided by financing activities
in cash
Cash at beginning of the year
Cash at end of the year
Explanation / Answer
Statement of Cash Flows
Cash flows from operating activities:
Net income
79,200
Adjustments to net income:
Increase in Accounts receivable
-11,200
Increase in Inventories
-5,100
Increase in accounts payable
6,800
Increase in accrued expenses
2200
Depreciation
8,700
Loss on sale of investment
6,000
Net cash provided by operating activities:
86,600
Cash flows from investing activities:
Sales of investment
54,000
Purchase of land
-174,000
Purchase of equipment
-47,400
Net cash used by investing activities:
-167,400
Cash flows from financing activities:
Sale of common stock
151,200
Dividends paid
-57,000
Net cash provided by financing activities:
94,200
Net increase in cash:
13,400
Cash, 6/30/09
28,200
Cash, 6/30/10
41,600
Statement of Cash Flows
Cash flows from operating activities:
Net income
79,200
Adjustments to net income:
Increase in Accounts receivable
-11,200
Increase in Inventories
-5,100
Increase in accounts payable
6,800
Increase in accrued expenses
2200
Depreciation
8,700
Loss on sale of investment
6,000
Net cash provided by operating activities:
86,600
Cash flows from investing activities:
Sales of investment
54,000
Purchase of land
-174,000
Purchase of equipment
-47,400
Net cash used by investing activities:
-167,400
Cash flows from financing activities:
Sale of common stock
151,200
Dividends paid
-57,000
Net cash provided by financing activities:
94,200
Net increase in cash:
13,400
Cash, 6/30/09
28,200
Cash, 6/30/10
41,600
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