Help solve Help solve Help solve Help solve EXERCISE 13-7 Prepare a Statement of
ID: 2573157 • Letter: H
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Help solve Help solve Help solve Help solve EXERCISE 13-7 Prepare a Statement of Cash Flows (Indirect Method) Comparative financial statement data for Holly Company are given below (LO2, LO3) December 31 2002 2001 4 36 75 29 61 180 (30) $247 Accounts receivable Accumulated depreciation.. 40) $285 $ 39 70 138 $247 Accounts payable 90 150 Retained earnings . . Total liabilities and stockholders' equity. . . $285- For 2002, the company reported net income as follows: Sales... . $500 Less operating expenses 180 Dividends of $8 were declared and paid during 2002. There were no sales of plant and equipment during the year Required: Using the indirect method. prepare a statement of cash flows for 2002. EXERCISE 13-8 (Appendix 13A) Net Cash Provided by Operating Activities (Direct Method) (LO4) Refer to the data for Holly Company in Exercise 13-7 Required Using the direct method, convert the company's income statement to a cash basis.Explanation / Answer
HOLLY COMPANY Cash Flow Statement For year ended 31 December 2012 Cash flows from operating activities Net Income $ 20 Adjustment to reconcile net income to: Depreciation expense $ 10 $40-$30 Changes in current operating assets and liabilities Increase in accounts receivable $ (7) Increase in inventory $ (14) Decrease in accounts payable $ 6 $ (5) Net cash provided by operating activities $ 15 Cash flows from investing activities Purchase of equipment $ (30) $180-$210 Net cash Used by investing activities $ (30) Cash flows from financing activities Cash received from stock issuance $ 20 $90-$70 Dividend paid $ (8) Net cash provided by financing activities $ 12 Net increase in cash and cash equivalents $ -3 Cash and cash equivalents at beginning of period $ 7 Cash and cash equivalents at end of period $ 4
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