Question

Question 10

The comparative balance sheets for Rothlisberger Company as of December 31 are presented below.

ROTHLISBERGER COMPANY Comparative Balance Sheets December 31
Assets		2020			2019
Cash		$58,100			$49,600
Accounts receivable		43,500			65,100
Inventory		152,000			144,500
Prepaid expenses		14,500			22,500
Land		101,600			134,000
Buildings		196,700			196,700
Accumulated depreciation—buildings		(56,800	)		(32,600	)
Equipment		231,700			157,600
Accumulated depreciation—equipment		(44,300	)		(35,200	)
Total		$697,000			$702,200
Liabilities and Stockholders’ Equity
Accounts payable		$46,300			$39,300
Bonds payable		260,000			292,600
Common stock, $1 par		192,600			160,000
Retained earnings		198,100			210,300
Total		$697,000			$702,200

Additional information:

1.		Operating expenses include depreciation expense of $42,000 and charges from prepaid expenses of $8,000.
2.		Land was sold for cash at book value.
3.		Cash dividends of $57,600 were paid.
4.		Net income for 2020 was $45,400.
5.		Equipment was purchased for $95,600 cash. In addition, equipment costing $21,500 with a book value of $12,800 was sold for $5,100 cash.
6.		Bonds were converted at face value by issuing 32,600 shares of $1 par value common stock.

***Prepare a statement of cash flows for the year ended December 31, 2020, 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).)

Answer 1

	Rothlisberger Company
	Statement of cash flow
	for the year ending dec 31,2020
Cash from operating activities
net income for the year					45,400
Adjustments to reconcile net income to
net cash from operating activities
Depreciation expense				42,000
loss on sale				7,700
Decrease in accounts receivable				21600
increase in inventory				-7500
decrease in prepaid expense				8000
increase in accounts payable				7000
					78,800
Net cash flow from operating activities					124,200
Cash from investing activities
cash from land sale				32400
cash from equipment sale				5,100
cash used to purchase equipment				-95,600
Net cash used by investing activities					-58,100
Cash from financing activities
Cash dividend paid					-57,600
net decrease in cash					8,500
cash at beginning of year					49,600
cash at year end					58,100
Non cash flow item
bonds converted to common stock					32,600