The management team of Wickersham Brothers Inc. is preparing its annual financia
ID: 2491517 • Letter: T
Question
The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized.
Prior Year
264,650
Other information from the company’s records includes the following:
Income tax expense ($7,190) and interest expense ($3,150) were paid in full at the end of both years and are included in Other Expenses.
Required:
Prepare the statement of cash flows using the indirect method. Include any supplemental disclosures.(Enter any deductions and cash outflows as a negative value.)
The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized.
Explanation / Answer
Cash flow statement Cash flow from operating activity Net Income 35950 Add : Depriciation 16240 Decrease in inventory 5250 increase in salaries and wages payable 1050 22540 Less Increase in accounts receivable -10500 decrease in accounts payable -2100 Taxes paid -7190 -19790 Net cash flow from operating activity 38700 Cash flow from investing activity Purchase of equipment -53000 Decrease of notes payable -10500 Net cash flow from investing activity -63500 Cash flow from financing activity Issuance of common stock 20000 Dividends paid ( 95+ 66 - 124) -17400 Net cash flow from financing activity 2600 Net cash increase -22200 Opening balance of cash 75900 closing balance of cash 53700 Net decrease in cash -22200
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