3.) A complex statement of cash flows (indirect method). The net changes in the

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3.) A complex statement of cash flows (indirect method). The net changes in the balance sheet accounts of Eusew, Inc. for the year 2018 are shown below: Credit S 100,600 $64,000 10,000 Accounts receivable Allowance for doubtful accounts Inventory Prepaid expenses Long-term investments Land Buildings Machinery Equipment Accumulated depreciation: 197,200 20,000 144,000 405,000 650,000 100,000 28,000 Buildings Machinery Equipment 24,000 20,000 12,000 183,200 72,000 128,000 36,000 900,000 Accrued liabilities Dividends payable Premium on bonds Bonds payable Preferred stock ($50 par) Common stock ($10 par) Additional paid-in capital common Retained earnings 70,000 156,000 223,200 Additional information 1. Net income for 2018 S160.000 2. Cash dividends of $128,000 were declared December 15, 2018, payable January 15, 2019 A 5% stock dividend was issued March 31, 2018, when the market value was $22.00 per share 3. The long-term investments were sold for $140,000 4. A building and land which cost $480,000 and had a book value of $350,000 were sold for $400,000. The cost of the land, included in the cost and book value above, was $20,000 5. The following entry was made to record an exchange of an old machine for a new one Machinery Accumulated Depreciation-Machinery 160,000 60,000 140,000 6. A fully depreciated copier machine which cost $28,000 was written off 7. Preferred stock of $70,000 par value was redeemed for $90,000. 8. The company sold 12,000 shares of its common stock (S10 par) on June 15, 2018 for $25 a share. There were 87,600 shares outstanding on December 31, 2018 9. Bonds were sold at 104 on December 31, 2018 10. Land that was condemned had a book value of $240,000. Proceeds received totaled $108,000 Instructions Prepare a statement of cash flows (indirect method). Ignore tax effects.

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Cash Flow from Operating Activities Net Income 160000 Adjustments to reconcile net income to net cashprovided by operating activities: Depreciation expense-buildings 1 154000 Depreciation expense-Machinery 2 60000 Depreciation expense-Equipment 3 16000 Gain on sale of building and land 4 -50000 Loss on sale of long term investment 5 4000 Decrease in Accounts Receivable (net) 74000 Increase in Inventory -197200 Increase in Prepaid Expense -20000 Decrease in Accounts Payable -183200 Increase in Accrued Liability 72000 Loss of land (240000-108000) 132000 61600 Net cash provided by operating activities 221600 Cash flow from investing Activities Sale of long term investment 140000 Proceeds from sale of land 108000 Purchase of land 6 -665000 Sale of building and land 400000 Purchase of building 7 -1110000 Purchase of machinery (Given-Cash paid) -140000 Net Cash used by investing activities -1267000 Cash flow from financing activities Sale of Bond (900000+36000) 936000 Retirement of preference shares -90000 Sale of ordinary shares 12000*25 300000 Net Cash provided by financing activities 1146000 Net Increase in cash 100600 1. Net Change 24000 Debit to Accumulated Depreciation (480000-350000) 130000 Depreciation Expense 154000 2. Net Change 20000 Debit to Accumulated Depreciation 40000 Depreciation Expense 60000 3. Net Change -12000 Write off 28000 Depreciation Expense 16000 4. Sale price of building and land 400000 Book value of building and land 350000 Gain on Sale 50000 5. Carrying value of long term investment 144000 Sale price of long term investment 140000 Loss on sale 4000 6. Net Change 405000 Land Sold and contamined(240000+20000) 260000 665000 7. Net Change 650000 Building Sold (480000-20000) 460000 1110000

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