SOMEONE PLEASE HELP I NEED THEM ALL CORRECT. Statement of Cash Flows—Indirect Me
ID: 2487034 • Letter: S
Question
SOMEONE PLEASE HELP I NEED THEM ALL CORRECT.
Statement of Cash Flows—Indirect Method
The comparative balance sheet of Mills Engine Co. at December 31, 2014 and 2013, is as follows:
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required.
Assignments The comparative balance sheet of Mills Engine Co. at December 31, 2014 and 2013, is as follows: Dec. 31, 2014 Dec. 31, 2013 Assets Cash Accounts receivable (net) Inventories Prepaid expenses Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment 594,880 541,340 820,930 19,040 204,640 945,860 (267,700) 333,130 (91,610) $3,100,510 $ 637,820 493,750 755,500 22,610 309,340 582,980 (249,850) 294,470 (102,910) $2,743,710 Liabilities and Stockholders Equity Accounts payable (merchandise creditors) Bonds payable Common stock, $20 par Paid-in capital in excess of par-common stock 589,100 173,630 206,000 492,000 $ 621,650 76,000 362,000Explanation / Answer
Cash Flow statement - indirect method Cash flow from opearting activities Amount Net Income (loss) -21320 Adjustments to Net income to convert it into cash basis Depreciation Expense ( 17850 + 21100) 38950 Loss on sale of equipment 0 Loss on sale of land ( 104700 - 97400) 7300 Increase in acccounts receivable -47590 Increase in inventory -65430 Decrease in prepaid expenses 3570 Decrease in Accounts Payable -32550 -95750 Net Cash flow from opearating activities - A -117070 Cash flow from Investing activities Equipment sold 0 Land sold 97400 Building Acquired -362880 Equipment purhased on cash -71060 -336540 Net Cash flow from Investing activities - B -336540 Cash flow from Financing activities Issue of Bonds 173630 Paid in capital 130000 Issued common stock 130000 Paid Cash dividend -22960 410670 Net Cash flow from Financing activities - C 410670 Net increase in cash and cash equivalent -42940 Add : cash and cash equivalent at beginning of year 637820 Cash and cash equivalent at end of year 594880 Notes: depreciation is non cash expense therefore added back to net income Profit / loss on sale of asset is to be dealt seperately in investing activities therfore reversed Increase in current asset means more cash involvement in opearting activities therfore subtracted from net income, and vice versa Decrease in current liability more cash is used to discharge liabilities therfore subtracted , and vice versa All purchase of asset and sale of asset is to be dealt in investing activities Financing activities relate to those transaction which arrange cash for business on account of capital or long term loan. cash used to repay capital , long term loans and profit distribution is also dealt in financing activities Equipment has been discarded hence no cash realised
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.