TOR PR?NTER VERSION .BACK E The following three accounts appear in the general l

Question

TOR PR?NTER VERSION .BACK E The following three accounts appear in the general ledger of Ri Corp during 2017 Date Debit 444,480 638,940 786,174 136,122 650,052 194,460 147,234 July 31 Sept. 2 Purchase of equipment Cost of equipment constructed Cost of equipment sold 10 Date 197,238 152,790 77,784 230,574 Accumulated depreciation on equipment sold 44,448 10 Dec. 31 Depreciation for year Debit Credit Balance 291,690 252,798 200,016 452,814 Date Dividends (cash) 38,892 From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of plant assets was $22,224. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $147,234.) (Show amounts that decrease cash flow with elther a - sign e.g.-15,000 or in parenthesis e.g. (15,000).) F1O ?0

Explanation / Answer

Cash flow from operating activities Net income 200016 Adjustments to reconcile the net income Depreciation expense 77784 Loss on disposal of plant asset 22224 100008 Net Cash increase from operating activities 300024 Cash flow from Investing activities Sales of equipment 69450 Construction of equipment -147234 Purchase of equipment -194460 Net Cash used by Investing activities -272244 Cash flow from Financing activities Dividend paid -38892 Net Cash used by Financing activities -38892

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