The following information is available for Ramos Corporation for the year ended

Question

The following information is available for Ramos Corporation for the year ended December 31, 2014.

Prepare a statement of cash flows using the indirect method

RAMOS CORPORATION
Statement of Cash Flows—Indirect Method
For the Year Ended December 31, 2014

Beginning cash balance $ 60,030 Accounts payable decrease 4,936 Depreciation expense 216,108 Accounts receivable increase 10,939 Inventory increase 14,674 Net income 378,989 Cash received for sale of land at book value 46,690 Cash dividends paid 16,008 Income taxes payable increase 6,270 Cash used to purchase building 385,526 Cash used to purchase treasury stock 34,684 Cash received from issuing bonds 266,800

Explanation / Answer

  Statement of cash flows using the indirect method

A) Cash flow from operating activities:-

Net income

Add:- Depreciation Expenses

Add:- Increase in Income tax payable

Less:- Increase in inventory

Less:- Increase in Receivable

  

378989

216108

6270

14674

10939

B) Cash flow from Investing activities:-

Cash received for sale of land at book value

Less:- Cash used to purchase building

46690

385526

C) Cash flow from financing activities:-

  Cash received from issuing bonds

Less:- Cash used to purchase treasury stock

Less:- Payment of Dividend

266800

34684

16008

Net increase in cash and cash equivalents = 575754 - 338836 + 216108

Add:- Cash at beginning of period

453026

60030

A) Cash flow from operating activities:-

Net income

Add:- Depreciation Expenses

Add:- Increase in Income tax payable

Less:- Increase in inventory

Less:- Increase in Receivable

  

378989

216108

6270

14674

10939

A) Cash flow from Operating activities 575754

B) Cash flow from Investing activities:-

Cash received for sale of land at book value

Less:- Cash used to purchase building

46690

385526

B) Cash from / (Used) in Investing activities ( 338836)

C) Cash flow from financing activities:-

  Cash received from issuing bonds

Less:- Cash used to purchase treasury stock

Less:- Payment of Dividend

266800

34684

16008

C) Cash flow from financing activities 216108

Net increase in cash and cash equivalents = 575754 - 338836 + 216108

Add:- Cash at beginning of period

453026

60030

Cash at the end of period 513056

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