Problem4: Using the following information, please construct a Cash Flows Stateme

Question

Problem4: Using the following information, please construct a Cash Flows Statement: $5,000 34.213 7,500 101,235 57,500 21,891 75,000 6.834 50,000 2.346 12,659 35.000 5,000 10,000 9,342 8,876 $155,594 Dividends Purchase of Equipment Increase in Inventories Cash 1/1/2014 Net Income ation Purchase of Buildin Loss on Sale of Equipment Issuance of Stock Increase in Prepaid Assets Cash From Sale of Equipment Issuance of Bonds Decreasein Accounts Receivable Payment of Notes Payable Decreasein Wages Payable Increase in Accounts Payable Cash 12/31/2015 le

Explanation / Answer

Cash Flow Statement For the year ended December 31, 2015 Cash flows from operating activities Net Income $   57,500 Adjustment to reconcile net income to: Depreciation expense $   21,891 Loss on sale of equipment $      6,834 Increase in inventories $   (7,500) Increase in prepaid assets $   (2,346) Decrease in accounts receivable $      5,000 Decrease in wages payable $   (9,342) Increase in accounts payable $      8,876 $   23,413 Net cash provided by operating activities $   80,913 Cash flows from investing activities Cash from sale of equipment $   12,659 Purchase of building $ (75,000) Purchase of equipment $ (34,213) Net cash used by investing activities $ (96,554) Cash flows from financing activities Proceeds from issue of bond $   35,000 Payment of note payable principle $ (10,000) Payment of dividends $   (5,000) Proceeds from issue of stock $   50,000 Net cash provided by financing activities $   70,000 Net increase in cash and cash equivalents $   54,359 Cash and cash equivalents at beginning of period $ 101,235 Cash and cash equivalents at end of period $ 155,594

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