Wheelhorse Products\' comparative balance sheets are presented below. Net income

Question

Wheelhorse Products' comparative balance sheets are presented below. Net income was $18,475. Dividends declared and paid were $11,500. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $20,000 Required: Prepare a statement of cash flows for the year ended December 31, 2015 using the indirect method. (for any accounts where the balance changed, create a T account or record other analysis for your review. You might make a column of changes, so you can see if a balance increased or decreased and by how much. You do not need to turn this in but you can. You may wish to use Excel for this problem. Copy and paste the balance sheet into your Excel file. If you use Excel you can submit a separate file for the statement of cash flow problem.

Explanation / Answer

Wheelhorse product Inc.

ash flow statement ( Indirect Method)

Net Income 18475 Cash flow form operating activity Adjustment Depriciation and amortisation 2410 Decrease in accounts receivable 1630 Increase in accounts Payable 3575 Increase in prepaid insurance 330 Gain on sale of land -5460 Net Cash low provided by operating activity 2485 Cash flow form investingactivity Land sold 20,000 Building purchase -15,600 Net Cash low provided by Investing activity 4400 Cash flow form operating activity Devidend declared and paid -11,500 Net Cash low provided by Financing activity -11500 Net increase in Cash 13860 Opeaning cash balance 10820 Closing cash balance 24,680

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