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Statement of Cash Flows—Indirect Method The comparative balance sheet of Coulson, Inc. at December 31, 20Y2...

Statement of Cash Flows—Indirect Method

The comparative balance sheet of Coulson, Inc. at December 31, 20Y2 and 20Y1, is as follows:

    Dec. 31, 20Y2      Dec. 31, 20Y1
Assets
Cash $300,600 $337,800
Accounts receivable (net) 704,400 609,600
Inventories 918,600 865,800
Prepaid expenses 18,600 26,400
Land 990,000 1,386,000
Buildings 1,980,000 990,000
Accumulated depreciation—buildings (397,200) (366,000)
Equipment 660,600 529,800
Accumulated depreciation—equipment (133,200) (162,000)
Total assets $5,042,400 $4,217,400
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors) $594,000 $631,200
Income taxes payable 26,400 21,600
Bonds payable 330,000 0
Common stock, $20 par 320,000 180,000
Paid-in capital in excess of par—common stock 950,000 810,000
Retained earnings 2,822,000 2,574,600
Total liabilities and stockholders' equity $5,042,400 $4,217,400

The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 20Y2 are as follows:

ACCOUNT Land ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 1,386,000
Apr. 20 Realized $456,000 cash from sale 396,000 990,000
ACCOUNT Buildings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 990,000
Apr. 20 Acquired for cash 990,000 1,980,000
ACCOUNT Accumulated Depreciation—Buildings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 366,000
Dec. 31 Depreciation for year 31,200 397,200
ACCOUNT Equipment ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 529,800
     26 Discarded, no salvage 66,000 463,800
Aug. 11 Purchased for cash 196,800 660,600
ACCOUNT Accumulated Depreciation-Equipment ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 162,000
    26 Equipment discarded 66,000 96,000
Dec. 31 Depreciation for year 37,200 133,200
ACCOUNT Bonds Payable ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
May 1 Issued 20-year bonds 330,000 330,000
ACCOUNT Common Stock, $20 par ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 180,000
Dec. 7 Issued 7,000 shares of common
stock for $40 per share
140,000 320,000
ACCOUNT Paid-in Capital in Excess of Par—Common Stock ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 810,000
Dec. 7 Issued 7,000 shares of common
stock for $40 per share
140,000 950,000
ACCOUNT Retained Earnings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 2,574,600
Dec. 31 Net income 326,600 2,901,200
    31 Cash dividends 79,200 2,822,000

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Coulson, Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y2
Cash flows from (used for) operating activities:
Net income $
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation
Gain on sale of land
Changes in current operating assets and liabilities:
Increase in accounts receivable
Increase in inventories
Decrease in prepaid expenses
Decrease in accounts payable
Increase in income taxes payable
Net cash flow from operating activities $
Cash flows from (used for) investing activities:
Cash received from sale of land $
Cash paid for acquisition of buildings
Cash paid for purchase of equipment
Net cash flow used for investing activities
Cash flows from (used for) financing activities:
Cash received from issuance of bonds payable $
Cash received from issuance of common stock
Cash paid for dividends
Net cash flow from financing activities
Net decrease in cash $
Cash balance, January 1, 20Y2
Cash balance, December 31, 20Y2    $   

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