Statement of Cash Flows-Indirect Method The comparative balance sheet of Olson-J

Question

Statement of Cash Flows-Indirect Method The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash Accounts receivable (net) Inventories Land Equipment Accumulated depreciation-equipment S168 95 60 137 $53 67 37 152 58 (21) S516 S356 Total Assets Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Dividends payable Common stock, $1 par Paid-in capital: Excess of issue price over par-- common stock Retained earnings $65 10 34 17 86 321 244 Total liabilities and stockholders equity S516 S356 The following additional information is taken from the records 1. Land was sold for $38 2. Equipment was acquired for cash. 3. There were no disposals of equipment during the year 4. The common stock was issued for cash 5. There was a $111 credit to Retained Earnings for net income. 6. There was a $34 debit to Retained Earnings for cash dividends declared

Explanation / Answer

SOLUTION

(A)

Olson-Jones Industries

Cash flow statement

(B) Olson-Jones net income is more than the cash flow from operations.

Particulars Amount ($) Amount ($) Cash flows from operating activities- Net Income 111 Adjustments to reconcile net income to cash flows from operating activities- Depreciation (21-11) 10 Gain on sale of land (152-137-38) (23) Changes in current operating assets and liabilities- Increase in accounts receivable (95-67) (28) Increase in inventories (60-37) (23) Increase in accounts payable (65-53) 12 Net cash flows from operating assets (A) 59 Cash flows from investing activities- Cash received from sale of land 38 Less: Cash paid for purchase of equipment (77-58) (19) Net cash flow from investing activities (B) 19 Cash flows from financing activities- Cash received from sale of common stock (34-17)+(86-42) 61 Less: Cash paid for dividends (34-10) (24) Net cash flows from financing activities (C) 37 Increase in cash (A+B+C) 115 Beginning cash balance 53 Ending cash balance 168

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.