Suppose your company reports $250 of net income and $58 of cash dividends paid,
ID: 2402746 • Letter: S
Question
Suppose your company reports $250 of net income and $58 of cash dividends paid, and its comparative balance sheet indicates the following Beginning Ending Cash Accounts Receivable Inventory $ 53 $ 293 165 263 335 223 Total $ 553 S 779 Common Stock Retained Earnings Salaries and Wages Payable $ 28 140 190 112 335 527 Total S 553 S 779 Required 1. Prepare the operating activities section of the statement of cash flows, using the indirect method (Amounts to be deducted should be indicated with a minus sign.) Net Income Increase in Accounts Receivable Decrease in Inventory Increase in Salaries and Wages Payable Dividends paid Net Cash Flow from Operating ActivitiesExplanation / Answer
Answer 1 Operating activities section of the statement of cash flows using the indirect method Net Income $250.00 Increase in Accounts Receivables -$98.00 Decrease in Inventory $112.00 Increase in Salaries and Wages Payable $112.00 Net Cash flow from Operating Activities $376.00 Answer 2 Consultex Inc. Statement of Cash flow for the year ended October 31,2015 (using the indirect method) Cash flows from Operating activities Net Income $2,170.00 Changes in Current assets and Current Liabilities Increase in Accounts Receivables -$1,400.00 Decrease in Prepaid Rent $700.00 Decrease in Salaries and Wages Payable -$700.00 -$1,400.00 Net Cash available from Operating activities $770.00 Cash flows from Investing activities Purchase of land -$13,000.00 Net Cash used for Investing activities -$13,000.00 Cash flows from Financing activities Repayment of Note Payable -$4,000.00 Payment of Cash dividend -$1,400.00 Purchase of Treasury Stock -$1,100.00 Borrowing by sigining Note $4,400.00 Issue of Common stock $11,400.00 Net Cash available from Financing activities $9,300.00 Net Cash Surplus / (deficit) -$2,930.00 Add : Cash balance as on 2014 $11,900.00 Cash balance as on 2015 $8,970.00
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