Exercise 12-5 The following information is available for Pharoah Company for the

Question

Exercise 12-5 The following information is available for Pharoah Company for the year ended December 31, 2017 Beginning cash balance Accounts payable decrease Depreciation expense Accounts receivable increase Inventory increase Net income Cash received for sale of land at book value Cash dividends paid Income taxes payable increase Cash used to purchase building Cash used to purchase treasury stock Cash received from issuing bonds $ 48,420 3,981 174,312 8,823 11,836 305,692 37,660 12,912 5,057 310,964 27,976 215,200 Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Explanation / Answer

Pharoah Company

Statement of Cash Flows - Indirect Method

For the Year Ended December 31,2017

  

Cash Flow from Operating Activities Net Income 305692 Adjustments to reconcile net income to Net cash provided by operating activities Depreciation Expense 174312 Accounts Payable Decrease -3981 Accounts Receivable Increase -8823 Inventory Increase -11836 Income Taxes Payable Increase 5057 154729 Net Cash flow from Operating Activities 460421 Cash Flow from Investing Activities Cash received from Sale of Land at Book Value 37660 Cash Used to Purchase Building -310964 Net Cash Flow from Investing Activities -273304 Cash Flow from Financing Activities Cash Dividends paid -12912 Cash used to Purchase Treasury Stock -27976 Cash received from Issuing Bonds 215200 Net Cash flow from Financing Activities 174312 Net Increase in Cash & Cash Equivalent 361429 Cash & Cash Equivalent at the Begining of the year 48420 Cash & Cash Equivalent at the End of the year 409849

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