Exercise 12-5 The following information is available for Bonita Industries for t

Question

Exercise 12-5

The following information is available for Bonita Industries for the year ended December 31, 2017.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Adjustments to reconcile net income to

Beginning cash balance $ 45,855 Accounts payable decrease 3,770 Depreciation expense 165,078 Accounts receivable increase 8,356 Inventory increase 11,209 Net income 289,498 Cash received for sale of land at book value 35,665 Cash dividends paid 12,228 Income taxes payable increase 4,789 Cash used to purchase building 294,491 Cash used to purchase treasury stock 26,494 Cash received from issuing bonds 203,800

Explanation / Answer

Solution - Statement of cash flows (Indirect Method)

Bonita Industries

Statement of Cash Flows

For the Year Ended December 2017

Net Increase in Cash

(A + B + C)

Cash at end of period

($45855 + 45855)

Particulars Amount Cash Flow From Operating Activities Net Income $289498 Adjustment to reconcile the net income to net cash provided by operating activities Add : Depreciation expenses $165078 Add : Increase in income tax payable $4789 Less : Accounts Payable Decrease (Cash Outflow) ($3770) Less : Accounts Receivable Increase (Outflow) ($8356) Less : Inventory Increase (Cash Outflow) ($11209) $146532 Net Cash Provided by Operating Activities (A) $436030 Cash Flow from Investing Activities Cash received from sale of land at book value $35665 Cash used to purchase Building ($294491) Net Cash Used by Investing activities (B) ($258826) Cash flow from Financing Activities Cash received from issuing bonds $203800 Cash Dividend Paid ($12228) Cash used to purchase treasury stock ($26494) Net Cash provided by financing activities (C) $165078

Net Increase in Cash

(A + B + C)

$342282 Cash at the Beginning of Period $45855

Cash at end of period

($45855 + 45855)

$388137

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.