Cash Flow Assignment Instuctions: Complete the statement of cash fiows for 2017

Question

Cash Flow Assignment Instuctions: Complete the statement of cash fiows for 2017 using the indirect method Here is a comparative balance sheet for Joe Compan JOE COMPANY Comparative Balance Sheet 31-Dec Assets Cash Accounts receivable 2017 2016 68,000.00 22,000.00 189,000.00 100,000.00 200,000.00 32,000.00 260,000.00 66,000.00 597,000.00 Equipment Accumulated De ciation Liabilities and Stockholders' equit Accounts pavable Bonds payable Common stock (S1 par Retained earnings Total 47,000.00 192,000.00 597.000.00 174,000.00 134,000.00 $555,000.00 Additional information: 1 Net income for 2017 was $93,000 2. Cash dividends of 35,000 were declared and paid 3. Bonds payable amounting to $50,000 were redeemed for cash $50,000. 4. Common stock was issued for $42,000 cash 5. No equipment was sold dur 2017

Explanation / Answer

Statement of cash flow : Indirect method :

Cash flow from operating activities Net income 93000 Adjustment to reconcile net income Depreciation exp 34000 Increase account payable (9000) Decrease inventory 19000 Decrease account payable (8000) Net cash flow from operating activities 129000 Cash flow from investing activities Sales of land 20000 Purchase of equipment (60000) Net cash flow from investing activities (40000) Cash flow from financing activities Redeem bonds payable (50000) Issue common stock 42000 Dividend paid (35000) Net cash flow from financing activities (43000) Net cash flow 46000 Beginning cash 22000 Ending cash 68000

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