15.On the basis of the following data for Breach Co. for the current and precedi
ID: 2513750 • Letter: 1
Question
15.On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method. Assume that equipment costing $25,000 was purchased for cash and no long-term assets were sold during the period.
Stock was issued for cash-3,200 shares at par.
Net income for the current year was $76,000.
Cash dividends declared and paid were $13,000.
Current Year
Prior Year
Assets
Cash$ 170,000
$74,000
Accounts Receivable (net)78,000
85,000
Inventories106,500
90,000
Equipment395,000
370,000
Accumulated Depreciation(195,000)
(158,000)
Total assets$ 554,500
$461,000
Liabilities and stockholders' equity
Accounts Payable (merchandise creditors)$51,000
$50,000
Taxes Payable2,500
5,000
Common Stock, $10 par262,000
230,000
Retained Earnings239,000
176,000
Total Liabilities and Stockholders' Equity$ 554,500
$461,000
Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Breach Co. Statement of Cash Flows For Year Ended December 31
Explanation / Answer
Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net income 76000 Adjustments to reconcile net income to Net cash provided by operating activities Depreciation expense 37000 Decrease in Accounts receivables 7000 Increase in inventory -16500 Increase in accounts payable 1000 Decrease in taxes payable -2500 26000 Net cash provided by operating activities 102000 Cash Flows from Investing Activities: Purchase of Equipment -25000 Net Cash Provided by Investing Activities -25000 Cash Flows from Financing Activities Payment of Cash Dividends -13000 Issuance of Common Stock 32000 Net Cash Used by Financing Activities 19000 Net Increase in Cash 96000 Cash at Beginning of Period 74000 Cash at End of Period 170000
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