Exercise 13-11 The following items were gathered from Sunland Industries’ genera

Question

Exercise 13-11

The following items were gathered from Sunland Industries’ general ledger:

Using the indirect method, construct Sunland Industries’ statement of cash flows. (Show amounts that decrease cash flow with either a - sign, e.g. -15,000 or in parentheses, e.g. (15,000).)

Sunland Industries
Statement of Cash Flows

Sale of marketable securities $ 14,020 Depreciation and amortization expense 24,362 Payment of cash dividends 3,313 Proceeds from disposal of equipment 879 Loss on disposal of equipment 220 Net income 25,753 Beginning Cash balance 20,100 Purchase of equipment 21,252 Decrease in Accounts Receivable 1,368 Proceeds from issuing common stock 2,081 Increase in Inventory 3,615 Increase in Accounts Payable 4,400 Ending Cash balance 65,003

Explanation / Answer

Answer:-

Sunland Industries Statement of Cash Flow (Using Indirect Method) For the year ended   Particulars Amount $ Cash flow from opreating activities Net Income 25753 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Depreciation 24362 Loss on disposal of equipment 220 Change in opreating assets & liabilities Decrease in accounts receivable 1368 Increase in inventory -3615 Increase in accounts payable 4400 Net cash flow from opreating activities (a) 52488 Cash Flow from Financing activities Cash dividends paid -3313 Common stock issued 2081 Net cash Flow from Financing activities (b) -1232 Cash Flow from Investing activities Sale of marketable securities 14020 Equipment purchased -21252 Equipment sold 879 Net cash Flow from Investing activities (c) -6353 Net Channge in cash c=a+b+c 44903 Beginning cash balance 20100 Closing cash balance 65003

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