Question

In: Accounting

The following information is available for Coronado Industries for the year ended December 31, 2017. Beginning...

The following information is available for Coronado Industries for the year ended December 31, 2017.

Beginning cash balance $  46,575
Accounts payable decrease 3,830
Depreciation expense 167,670
Accounts receivable increase 8,487
Inventory increase 11,385
Net income 294,044
Cash received for sale of land at book value 36,225
Cash dividends paid 12,420
Income taxes payable increase 4,865
Cash used to purchase building 299,115
Cash used to purchase treasury stock 26,910
Cash received from issuing bonds 207,000



Prepare a statement of cash flows 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).)

Solutions

Expert Solution

Coronado Industries

Cash Flow Statement

For year ended 31st December 2017

A. Cash Flows from Operating Activity

Net Income

$    294,044.00

Adjustments to reconcile net income to net cash flow from operating activities:

Depreciation expense

$    167,670.00

Changes in current operating assets and liabilities:

Increase in Accounts receivables

$      (8,487.00)

Increase in Inventory

$    (11,385.00)

Increase in income tax payable

$        4,865.00

Decrease in Accounts payable

$      (3,830.00)

$    148,833.00

Net cash flow from Operating activities

$    442,877.00

B. Cash flows from Investing Activities

Cash received from sale of land

$      36,225.00

Purchase of Building

$ (299,115.00)

Net cash flow used for investing activities

$ (262,890.00)

C. Cash Flows from Financing activities

Purchase of treasury stock

$    (26,910.00)

Issue of Bond

$    207,000.00

Cash paid for dividends

$    (12,420.00)

Cash flows from Financing activities

$    167,670.00

Net Increase (Decrease) in Cash [A+B+C]

$    167,670.00

Cash at the beginning

$      46,575.00

Cash at the end

$   214,245.00


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