Otten Corporation Balance Sheet December 31, 2014 and 2013 Assets $13,000 14,000

Question

Otten Corporation Balance Sheet December 31, 2014 and 2013 Assets $13,000 14,000 15,000 9,000 51,000 58,000 (24,000) $85.000 Cas.. $38,000 ..18,000 .25,000 7,000 88,000 ....60,000 (18,000) $130.000 Inventory Prepaid insurance Current Asset... Equipmen. Accumulated depreciation-equipment.. $ 25,000 25,000 .37,000 7,000 7,000 45,000 23,000 Accounts payable.... Current Liabilities Bonds payable. Common stock... Retained earnings.. 30.000 $85,000 Additional information for the year ending 12/31/14 (including income statement information): 1. Net income was $30,000. stock was issued for $17,000. 3. Cash dividends of $12,000 were declared and paid during the year 4. Equipment was sold for $13,000, resulting in a $5,000 gain. 5. Equipment was purchased for $20,000. 6. Depreciation expense was $4,000. 7. Bonds of $8,000 were repaid during the year. Instructions Prepare a Statement of Cash Flows for the year ended 2014 using the indirect method. Path: p

Explanation / Answer

Statement of cash flow :

Cash flow from operating activities Net income 30000 Adjustment to reconcile net income Depreciation exp 4000 Gain on sale of equipment (5000) Increase account receivable (4000) Increase inventory (10000) Decrease prepaid insurance 2000 Increase account payable 18000 Net cash flow from operating activities 35000 Cash flow from investing activities equipment sold 13000 Equipment purchased (20000) Net cash flow from investing activities (7000) Cash flow from financing activities Bonds repaid (8000) Dividend paid (12000) Issue common stock 17000 Net cash flow from financing activities (3000) Net cash flow 25000 Beginning cash 13000 Ending cash 38000

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