Olbrot Corporation\'s income statement for the year ended June 30, 2010 and its

Question

Olbrot Corporation's income statement for the year ended June 30, 2010 and its comparative balance sheets for June 30. 2010 and 2009 follow. Olbrot issued a $44 000note payable .or purchase of furniture; sold furniture ,hat cost $54.000 with cumulated deprecation of $30,600 at carrying value recorded deprecation on the furniture for the year, $38,600; repaid a note in the amount of $40,000; issued $50.000 of common stock at par value; and paid dividend of $8.600. Prepare Olbrot's statement of cash flows for the year 2010 using the indirect method.

Explanation / Answer

Cash flow Statement of Olbrot corporation Cash from operating activities Net profit before depriciation 48100 Depriciation for the year 38600 Operating Profit before working capital changes 86700 Decrease in accounts receiables 10000 decrease in inventory 10000 Increase in prepaid expenses -1200 decrease in accounts payables -2000 16800 Cash generated from operations 103500 Income tax paid 13500 Net cash from operatin activities 90000 Cash flow from Investing aActivities Purchase of furniture 44000 sale of furniture 23400 Cash flow from Investing activities -20600 Cash flow from Financing Activities share capital issues 50000 Dividend paid 8600 Note Payable Issued 44000 Pote payable paid -40000 Cash flow from fiancing activities 45400 Net Increase In cash 114800 Opening balance of cash 25000 Closing balance of Cash 139800

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