Cash Flow statement Preparation - Indirect Method The Murdock corporation the fo

Question

Cash Flow statement Preparation - Indirect Method The Murdock corporation the following balance sheet data for 2009 and 2008. Additional information for 2009: Sold available-for-sale securities costing dollar 69,500 for dollar 74 000 Equipment costing dollar 20,000 with a book value of dollar 5,000 (i e 75percenge depreciated) was sold for dollar 6,00 Issued 6percentage bonds payable at par, dollar 200.000. Purchased new equipment for cash dollar 145,000. Paid cash dividends of dollar 20,000. Net income was dollar 50,000.

Explanation / Answer

The Murdock Corporation statement of cash flows for the year ended December 31, 2009 Cash flow from Operating Activities Net Income $50,000 Adjustments - Depreciation Expense $53,000 Gain on disposal of Equipment -$1,000 Gain on sale of Investment -$4,500 Increase in accounts receivable -$11,750 Increase in Inventory -$20,000 Decrease in Prepaid Insurance $500 Decrease in Accounts Payable -$26,420 Decrease in Salary Payable -$4,500 Increase in Income tax payable -$14,670 Net cash flow from Operating Activities $35,330 Cash flow from Investing Activities     Sale of equipment $6,000     Purchase of equipment -$1,45,000    Sale of Investments $74,000    Purachase of Investments Net cash outflow from Investing Activities -$65,000 Cash Flow from Financing Activites Issue of Bonds payable $2,00,000 Repayment of Notes Payable -$50,000 Payment of cash dividends -$20,000 Net cash flow from Financing Activities $1,30,000 Net Increase in cash $1,00,330 Cash Balance - Beginning -$22,955 Cash Balance - Ending $77,375

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

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