Left Side choices: Natalie Daniels has completed the basic format to be used in

ID: 2488961 • Letter: L

Question

Left Side choices:

Natalie Daniels has completed the basic format to be used in preparing the statement of cash flows (indirect method) for CPU Hardware Designers. All amounts are in thousands (000s CPU HARDWARE DESIGNERS Statement of Cash Flows For the year ended December 31, 2015 Cash Flows from Operating Activities Agust ments for noncash effects: Changes in cument assets and curent liabilties: Net cash flows from operating activities Cash Flows from lnvesting Activities Net cash flows from investing activities Cash Flows from Financing Activities Net cash flows from financing activities (30,000) Net increase (decrease) in cash Cash at the beginning of the period 85,000 s 46,000 Cash at the end of the period Below, in random order, are line items to be included in the statement of cash flows. 3,500 Cash received from the sale of land 275,000 suance of common stock 25,000 Depreciation expense accounts receivable 65,000 Increase in accounts payable 12,000 Loss on sale of land 7.500 225,000 Purchase of equipment Increase in inventory 35,000 12,000 Increase in prepaid rent Payment of dividends 45,000 Net income 75,000 Repayment of notes payable 55,000

Explanation / Answer

Statement of Cash flows using Indirect method:

CPU HARDWARE DESIGNERS

Statement of Cash Flows

For the year ended 31st December, 2015

Particulars

Amount ($ in 000s)

Cash flows from operating activities

Net Income

75,000

Adjustments for non cash effects:

Depreciation

25,000

Loss on sale of land

7,500

Changes in current assets and current liabilities:

Increase in accounts receivable

(65,000)

Increase in accounts payable

12,000

Increase in Inventory

(35,000)

Increase in prepaid rent

(12,000)

Net Cash flows from operating activities

7,500

Cash flows from Investing activities

Purchase of Equipment

(225,000)

Cash received from Sale of Land

3,500

Net Cash flows from Investing activities

(221,500)

Cash flows from Financing activities

Issuance of common stock

275,000

Payment of dividend

(45,000)

Repayment of notes payable

(55,000)

Net Cash flows from Financing activities

175,000

Net Increase/(decrease) in cash

(39,000)

Cash at beginning of the period

85,000

Cash at end of the period

46,000