repaie ent or cash hows, using the indirect method of presenting cash flows oper

Question

repaie ent or cash hows, using the indirect method of presenting cash flows operating activities. PR 16-2A Statement of cash flows-indirect method The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: OBJ. 2 Dec. 31,20Y8 Dec. 31, 20Y7 Assets $ 80,000 100,000 300,000 400,000 10,000 750,000 (160,000) $1,750,000 $1,400,000 275,000 510,000 15,000 1,070,000 (200,000) Merchandise inventory . a Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-202

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Income       190,000.00 Depreciation       115,000.00 Decrease in AR         25,000.00 Increase in inventory     (110,000.00) Increase in prepaid expenses         (5,000.00) Increase in AP         10,000.00 Cash flow from operating activities       225,000.00 Cash flow from Investing activities Purchase of PPE     (395,000.00) Cash flow from Investing activities     (395,000.00) Cash flow from Financing activities Issue of Stock       400,000.00 Issue of additional Paid in capital       200,000.00 Redemption of notes     (400,000.00) Dividends Paid       (50,000.00) Cash flow from Financing activities       150,000.00 net change in cash and cash equivalents       (20,000.00) Opening cash and cash equivalents       100,000.00 Closing cash and cash equivalents         80,000.00

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