16.3 #7 Statement of Cash Flows—Indirect Method The comparative balance sheet of

Question

16.3

#7

Statement of Cash Flows—Indirect Method

The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:

The following additional information is taken from the records:

Land was sold for $28.

Equipment was acquired for cash.

There were no disposals of equipment during the year.

The common stock was issued for cash.

There was a $63 credit to Retained Earnings for net income.

There was a $19 debit to Retained Earnings for cash dividends declared

a. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

For the Year Ended December 31, 20Y2

Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $95 $31 Accounts receivable (net) 54 39 Inventories 34 21 Land 77 88 Equipment 44 34 Accumulated depreciation-equipment (12) (6) Total Assets $292 $207 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $37 $31 Dividends payable 6 - Common stock, $1 par 19 10 Paid-in capital: Excess of issue price over par—common stock 44 24 Retained earnings 186 142 Total liabilities and stockholders' equity $292 $207 Course Schedule - Homepage MNA2Cengage v2 cengagenow con intake ssignmen takeAssignmen Main doi voker-assignments& takeAssignmentSessionLoca or-assignment t ? E C Chegg Study | Guide .., CengageNOVv2 × |?Outlook.com-Micrc + v ? ? ? ? ? ? ? ? Ch 16-3 Exercises and Problems Show Me HowCalculator ?Print item eBook Cash flows from operating activities: 1. EX.16-02.ALGO 2. EX.16-03 Adjustments to reconclle net income to net cash flow from operating activities: 3. EX.16-04 4. EX.16-05.ALGO 5. EX. 16-06·BLANKSHEET.AL . Changes in current operating assets and liabilities: 6. EX.16-11.ALGO 7. EX.16-17.ALGO 8. PR. 16-01.ALGO Net cash flow from operating activities Cash flows from (used for) investing activities: Net cash flow from investing activities Cash flows from (used for) financing activities: Check My Work 2 more Check My Work uses remalning Previous Next Progress: 718 items Assignment Score: 12.5% All work saved. Email Instructor Save and Exit Submit Assignment for Grading 12:58 AM Type here to search 4/7/2018 21

Explanation / Answer

Books of Olson-Jones Industries Inc

Particulars $

Retained earnings 63

Adjustment for non cash items

(-) Profit on sale of land ($28-$11) -17

(+) Acccumulated depreciation 6

(-) Increase in inventories -13

(-) Increase in trade receivables -15

(+) Increase in trade payables 6

Cash outflow from operating activities 30

Cash flow from investing activities

(+) Cash received from land sale 28

(-) Cash paid for equipment -10

Cash flow from investing activities 18

Cash flow from financing activities

(+) Cash receipt from issue of shares 9

(+) Cash receipt from securities premium 20

(-) Dividend paid ($19- $6) -13

Cash flow from financing activities 16

Net increase in cash 64

(+) Cash at the beginning of the year 31

Cash at the end of the year 95

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