Natalie King has completed the basic format to be used in preparing the statemen

Question

Natalie King has completed the basic format to be used in preparing the statement of cash flows (indirect method) for CPU Hardware Designers. All amounts are in thousands (000s). CPU HARDWARE DESIGNERS Statement of Cash Flows For the year ended December 31, 2018 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash flows from operating activities Net cash flows from operating activities Cash Flows from Investing Activities Net cash flows from investing activities Cash Flows from Financing Activities Net cash flows from financing activities Net increase (decrease) in cash Cash at the beginning of the period S (28,000) 90,000 Cash at the end of the period S 62,000 Below, in random order, are line items to be included in the statement of cash flows. Cash received from the sale of land Issuance of common stock Depreciation expense Increase in accounts receivable Increase in accounts payable Loss on sale of land Purchase of equipment Increase in inventory Increase in prepaid rent Payment of dividends Net income Repayment of notes payable $ 4,000 300,000 30,000 70,000 11,000 8.000 230,000 40,000 11,000 50,000 80,000 60,000

Explanation / Answer

Statement of cash flow cash flow from operating activity Net Income 80000 Adjustement to reconcile net income to cash flow Depreciation 30000 loss on sale of land 8000 Increase in accounts receivable -70000 Increase inaccounts payable 11000 Increase in inventory -40000 Increase in prepaid rent -11000 -72000 Net cash flow from operating activity [A] 8000 Cash flow from investing activity sale of land 4000 purchase of equipment -230000 Net cash used by investing activity [B] -226000 Cash flow from financing activity issue of common stock 300000 repayment of note payable -60000 payment of dividend -50000 Net cash flow from financing activity [C] 190000 Increase/(decrease)in cash -28000 cash at beginning 90000 cash at end 62000

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