Usingthe iems below, prepare a classified statement of cash flows for Ella\'s Bo

Question

Usingthe iems below, prepare a classified statement of cash flows for Ella's Boutique in proper ormat for the year ended December 31,2014. You must compute the operating cash flows before preparing the statement and may use either the direct or indirect method. Please show your work for the operating activities on the following blank page. Then, present your final and Part Ill-Statement of Cash Flows (18 Points) complete classified statement of cash flows at the bottom of this page Beg. Balance $ 35,000 40,000 10,000 6,000 $ 20,000 50,000 12,000 1,000 Accounts Receivable Accounts Payable Wages Payable Sales for year Cost of Goods Sold Wages Expense Depreciation Expense Net Income 40,000 (20,000) (15,000) 3,000 Investing and Financing Items iet Proceeds from the Sale (issuance) of Common Stock Dividends Paid Purchases of Property, Plant, and Equipment Proceds from salc of Property, Plant, and Equipment Repayments of Long-Term Debt 60,000 40,000 0,000 20,000 30,000 0,000 Proceeds from Issuance of Bonds

Explanation / Answer

Cash flow from operations

Net Income = 3000

+ Depreciation = 2000

+ Decrease in Accounts Receivable = (35000-20000) 15000

- Increase in Inventories (10000-12000) = -2000

+ Increase in Accounts payable = (50000-40000) 10000

- Decrease in Wages payable = (1000-6000) -5000

Cash flow from operations = 23000

CALCULATION FOR CASH FLOW FROM INVESTING

Cash outflow for purchasing PP&E = -10000

Cash inflow for disposing PP&E = 20000

Cash flow from investing = 10000

CALCULATION FOR CASH FLOW FROM FINANCING

Proceeds from sale of common stock = +60000

Dividends paid = - 40000

Repayment of long term debt = - 30000

Issuance of bonds = + 50000

Cash flow from financing = 60000

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