Condensed financial data of Bramble Company for 2017 and 2016 are presented belo

Question

Condensed financial data of Bramble Company for 2017 and 2016 are presented below.

BRAMBLE COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

2017

2016

$1,800

$1,130

1,750

1,320

1,630

1,890

1,910

1,720

(1,190

(1,170

1,280

1,410

$7,180

$6,300

$1,230

$910

190

240

1,400

1,540

1,930

1,680

2,430

1,930

$7,180

$6,300

BRAMBLE COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017

$6,890

4,730

2,160

940

1,220

90

1,310

550

260

$500

Additional information:

During the year, $60 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017.Prepare a statement of cash flows using the indirect method.

BRAMBLE COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

2017

2016

Cash

$1,800

$1,130

Receivables

1,750

1,320

Inventory

1,630

1,890

Plant assets

1,910

1,720

Accumulated depreciation

(1,190

)

(1,170

) Long-term investments (held-to-maturity)

1,280

1,410

$7,180

$6,300

Accounts payable

$1,230

$910

Accrued liabilities

190

240

Bonds payable

1,400

1,540

Common stock

1,930

1,680

Retained earnings

2,430

1,930

$7,180

$6,300

Explanation / Answer

Cash Flow statement is as prepared below:

Working:

Non cash activities: $60 common stock issued in exchnage for plant assets

Bramble Company Statement of Cash Flows For the Year Ended December 31,2017 Cash Flows From Operating Activities Net Income (Given) 500 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense 20 Gain on sale of investments -90 Increase in Receivables (1,750-1,320) -430 Decrease in Inventory (1,630-1,890) 260 Increase in accounts payable (1,230-910) 320 Decrease in accrued liabilities (190-240) -50 Net Cash Provided by Operating Activities 530 Cash Flows From Investing Activities sale of long term investments (130+90) 220 Purchase of plant assets 130 Net Cash Used by Investing Activities 350 Cash Flows From Financing Activites Bonds paid -140 Common Stock issued 190 Payments of Cash Dividends -260 Net Cash Used by Financing Activities -210 Net Increase in Cash 670 Cash at Beginning of the Year 1,130 Cash at end of Year 1,800

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