3. Below is financial information extracted from financial statements for KHLED
ID: 2525377 • Letter: 3
Question
3. Below is financial information extracted from financial statements for KHLED Inc. for 2016.
items
Amounts in thousands of Saudi Riyal
Net in come
200
Depreciation expense
15
Increase in accounts receivable
35
Decrease in inventory
30
Increase in accounts payable
20
Proceeds from sale of land
50
Purchases of equipment
20
Proceeds from issuance of common stock
40
Cash dividends
5
Cash, January 1, 2016
100
Required: Prepare cash flow statement for KHALED Inc. for 2016 using the indirect method.
The answer should not be photo or handwriting.
items
Amounts in thousands of Saudi Riyal
Net in come
200
Depreciation expense
15
Increase in accounts receivable
35
Decrease in inventory
30
Increase in accounts payable
20
Proceeds from sale of land
50
Purchases of equipment
20
Proceeds from issuance of common stock
40
Cash dividends
5
Cash, January 1, 2016
100
Explanation / Answer
KHLED Inc.
Statement of Cash Flows For 2016
(Indirect Method)
Cash Flows from Operating Activities
Net Income $200
Adjustments to reconcile net income to
Net Cash Provided by Operating Activities
Depreciation Expense $15
Decrease in Inventory $30
Increase in Accounts Payable $20
Increase in Accounts Receivables ($35)
Net Cash Provided by Operating Activities $30
Cash Flows from Investing Activities
Proceeds from sale of land $50
Purchases of equipment ($20)
Net Cash Provided by Investing Activities $30
Cash Flows from Financing Activities
Proceeds from issuance of common stock $40
Payment of Cash Dividends- ($5)
Net Cash from Financing Activities- $35
Net Increase in Cash $295
Cash at Beginning of Period $100
Cash at End of Period $395
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