Question

Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in preparing the statement of cash flows (indirect method) for ATM Software Developers. All amounts are in thousands (000s).

ATM SOFTWARE DEVELOPERS
Statement of Cash Flows
For the year ended December 31, 2021
Cash Flows from Operating Activities
Net income	$
Adjustments to reconcile net income to net cash flows from operating activities:
Net cash flows from operating activities
Cash Flows from Investing Activities
Net cash flows from investing activities
Cash Flows from Financing Activities
Net cash flows from financing activities
Net increase (decrease) in cash	$	1,845
Cash at the beginning of the period		8,100
Cash at the end of the period	$	9,945

Listed below in random order are line items to be included in the statement of cash flows.

Cash received from the sale of land	$	8,490
Issuance of common stock		12,675
Depreciation expense		5,385
Increase in accounts receivable		3,930
Decrease in accounts payable		1,680
Issuance of long-term notes payable		16,095
Purchase of equipment		39,465
Decrease in inventory		1,395
Decrease in prepaid rent		825
Payment of dividends		6,210
Net income		10,800
Purchase of treasury stock		2,535

Required:

Prepare the statement of cash flows for ATM Software Developers using the indirect method. (List cash outflows and any decrease in cash as negative amounts. Enter your answers in thousands (i.e., 10,000,000 should be entered as 10,000).)

Answer 1

Answer-

ATM SOFTWARE DEVELOPERS
STATEMENT OF CASH FLOWS    (USING INDIRECT METHOD)
FOR THE YEAR ENDED DECEMBER 31
Particulars		Amount
		$
Cash flow from operating activities
Net Income		10800
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation		5385
Change in operating assets & liabilities
Increase in accounts receivable		-3930
Decrease in inventories		1395
Decrease in prepaid rent		825
Decrease in accounts payable		-1680
Net cash flow from operating activities (a)		12795
Cash Flow from Investing activities
Cash received from sale of land		8490
Purchase of equipment		-39465
Net cash Flow from Investing activities (c)		-30975
Cash Flow from Financing activities
Cash dividends paid		-6210
Issuance of common stock		12675
Issuance of long term note payable		16095
Purchase of treasury stock		-2535
Net cash Flow from Financing activities (b)		20025
Net Change in cash c=a+b+c		1845
Beginning cash balance		8100
Closing cash balance		9945