Selected financial statement information and additional data for ABC Co. is pres

Question

Selected financial statement information and additional data for ABC Co. is presented below. Prepare a statement of cash flows for the year ending December 31, 2016 December 31
                                                          2015                  2016
Cash                                             $40,000                  $ ?
Accounts receivable (net) 84,000                  144,200
Inventory 168,000                  201,600
Land 58,800                  16,000
Equipment 504,000                  789,600
TOTAL   $854,800             $1,224,400
Accumulated depreciation $84,000              $115,600
Accounts payable 50,400                  86,000
Notes payable - Short-term 67,200                   29,400
Notes payable - Long-term 168,000                  302,400
Common stock 420,000                  487,200
Retained earnings 65,200                  203,800
TOTAL   $854,800             $1,224,400

Additional data for 2016:
1. Net income was $240,200.
2. Depreciation was $31,600.
3. Land was sold at its original cost.
4. Dividends of $101,600 were paid.
5. Equipment was purchased for $84,000 cash.
6. A long-term note for $201,600 was used to pay for an equipment purchase.
7. Common stock was issued to pay a $67,200 long-term note payable.

Instructions:
(1)Net cash provided (used) by operating activities (3 points)
(2)Net cash provided (used) by investing activities (3 points)
(3)Net cash provided (used) by financing activities (2 points)
(4)Changes in cash account (1points)
(5)Disclosure of noncash transactions (1 points)

Explanation / Answer

$73,000

Depreciation of $31,600 is NOn Cash Item so it does not require any effect on Cash flow transaction.

Abc Co. Statement of Cash Flow For the year ened on December 31, 2016 Amount Amount Cash Flow from Operating activities Net Income $240,200 Adjustment for: Depreciation $31,600 Increase in Accounts receivable ($60,200) Increase in Inventory ($33,600) Increase in Accounts Payable $35,600 Decrease in Notes Payable-Short term ($37,800) ($64,400) Cash Generated from Operations $175,800 Cash flow from Investing activities Sale of Land $42,800 Purchase of Equipment ($84,000) Equipment Purchase of by creating Long term debt ($201,600) Net Cash Used in Investing Activities ($242,800) Cash Flow from Financing Activities Long term debt for Purchase of Equipment $201,600 Payment of Long term debt ($67,200) Issue of Common Stock $67,200 Dividends Paid ($101,600) Net Cash Proceeds from Financing activities $100,000 Net Increase in Cash and Cash Equivalents $33,000 Cash Balance at the begging of the period $40,000 Cash balance at the end of the period

$73,000

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