Hunter Company is developing its annual financial statements at December 31, 201

Question

Hunter Company is developing its annual financial statements at December 31, 2015. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized Balance Sheet at December 31 Cash Accounts Receivable Inventory Equipment Accumulated Depreciation-Equipment (36,200) (29,000) $ 46,22017,000 27,000 34,000 100,000 25,200 28,200 108,800 $172,220 $149,000 Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings $ 23,800 820 36,000 79,000 32,600 21,000 1,000 46,000 58,000 23,000 $172,220 $149,000 Income Statement for 2015 Sales Revenue Cost of Goods Sold Other Expenses $112,000 67,000 31,800 Net Income $ 13,200 Additional Data: a. Bought equipment for cash, $8,800 b. Paid $10,000 on the long-term note payable. c. Issued new shares of stock for $21,000 cash. d. Declared and paid a $3,600 cash dividend e. Other expenses included depreciation, $7,200; salaries and wages, $11,200; taxes, $4,200; utilities, $9,200. f. Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash Required: 1. Prepare the statement of cash flows for the year ended December 31, 2015, using the indirect method (Amounts to be deducted should be indicated with a minus sign.)

Explanation / Answer

Answer:-

Hunter Company Statement of Cash Flow (Using Indirect Method) For the year ended 31 December,2015 Particulars Amount $ Cash flow from opreating activities Net Income 13200 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Depreciation 7200 Change in opreating assets & liabilities Decrease in accounts receivable 1800 Decrease in inventory 5800 Increase in accounts payable 2800 Decrease in salaries & wages payable -180 Net cash flow from opreating activities (a) 30620 Cash Flow from Financing activities Dividend paid -3600 Issue of common stock 21000 Long term note paid -10000 Net cash Flow from Financing activities (b) 7400 Cash Flow from Investing activities Equipment purchased -8800 Net cash Flow from Investing activities (c) -8800 Net Channge in cash c=a+b+c 29220 Beginning cash balance 17000 Closing cash balance 46220

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