Condensed financial data of Ayayai Company for 2017 and 2016 are presented below

Question

Condensed financial data of Ayayai Company for 2017 and 2016 are presented below.

AYAYAI COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

2017

2016

$1,770

$1,170

1,790

1,320

1,610

1,940

1,910

1,680

(1,200)

(1,190)

1,300

1,420

$7,180

$6,340

$1,210

$910

200

240

1,370

1,560

1,880

1,740

2,520

1,890

$7,180

$6,340

AYAYAI COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017

$7,010

4,730

2,280

930

1,350

80

1,430

540

260

$630

Additional information:

During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

AYAYAI COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

2017

2016

Cash

$1,770

$1,170

Receivables

1,790

1,320

Inventory

1,610

1,940

Plant assets

1,910

1,680

Accumulated depreciation

(1,200)

(1,190)

Long-term investments (held-to-maturity)

1,300

1,420

$7,180

$6,340

Accounts payable

$1,210

$910

Accrued liabilities

200

240

Bonds payable

1,370

1,560

Common stock

1,880

1,740

Retained earnings

2,520

1,890

$7,180

$6,340

Explanation / Answer

Prepare a statement of cash flows using the indirect method.

Cash flow from operating activities Net income 890 Adjustment to reconcile net income Depreciation expense 10 Gain on sale of investment -80 Increase account receivable -470 Decrease inventory 330 Increase account payable 300 Decrease accured liabilities -40 Net cash flow from operating activities 940 Cash flow from investing activities Sale of long term investment 200 Purchase of property,plant and equipment -230 Net cash flow from investing activities -30 Cash flow from financing activities Bond repaid -190 Issue common stock 140 Dividend paid -260 Net cash flow from financing activiites -310 Net cash flow 600 Beginning cash 1170 Ending cash 1770

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