Question

Sole the follwing problem

Statement of cash flows—indirect method

The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as follows:

1		Dec. 31, 20Y3	Dec. 31, 20Y2
2	Assets
3	Cash	$625,650.00	$586,340.00
4	Accounts receivable (net)	228,170.00	208,030.00
5	Inventories	641,480.00	617,130.00
6	Investments	0.00	240,290.00
7	Land	328,170.00	0.00
8	Equipment	706,070.00	552,300.00
9	Accumulated depreciation-equipment	(165,580.00)	(147,010.00)
10	Total assets	$2,363,960.00	$2,057,080.00
11	Liabilities and Stockholders’ Equity
12	Accounts payable (merchandise creditors)	$424,300.00	$404,860.00
13	Accrued expenses payable (operating expenses)	41,850.00	52,880.00
14	Dividends payable	23,200.00	19,880.00
15	Common stock, $4 par	153,000.00	99,000.00
16	Paid-in capital: Excess of issue price over par—common stock	418,000.00	279,800.00
17	Retained earnings	1,303,610.00	1,200,660.00
18	Total liabilities and stockholders’ equity	$2,363,960.00	$2,057,080.00

Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:

A.	The investments were sold for $280,680 cash.
B.	Equipment and land were acquired for cash.
C.	There were no disposals of equipment during the year.
D.	The common stock was issued for cash.
E.	There was a $199,210 credit to Retained Earnings for net income.
F.	There was a $96,260 debit to Retained Earnings for cash dividends declared.

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Labels and Amount Descriptions

Labels and Amount Descriptions
Cash paid for dividends
Cash paid for merchandise
Cash paid for purchase of equipment
Cash paid for purchase of land
Cash received from customers
Cash received from sale of common stock
Cash received from sale of investments
Change in cash
December 31, 20Y3
Decrease in accounts payable
Decrease in accounts receivable
Decrease in accrued expenses payable
Decrease in inventories
Depreciation
For the Year Ended December 31, 20Y3
Gain on sale of investments
Increase in accounts payable
Increase in accounts receivable
Increase in accrued expenses payable
Increase in inventories
Loss on sale of investments
Net cash flow from operating activities
Net cash flow used for operating activities
Net cash flow from investing activities
Net cash flow used for investing activities
Net cash flow from financing activities
Net cash flow used for financing activities
Net income
Net loss

Answer 1

Livers Inc
Statement of Cash flows
For the Year Ended November 30, 20Y3
Cash flows from operating activities
Net Income		$   199,210
Adjustments to reconcile net income to ;
Depreciation expense	$      18,570		165580-147010
Gain on sale of investment	$   (40,390)		240290-280680
Increase in accounts receivable	$   (20,140)		208030-228170
Increase in inventories	$   (24,350)		617130-641480
Increase in accounts payable	$      19,440		424300-404860
Decrease in accrued expense payable	$   (11,030)		41850-52880
		$   (57,900)
Net cash provided by operating activities		$   141,310
Cash flows from investing activities
Cash paid for purchase of equipment	$ (153,770)		552300-706070
Cash paid for purchase of land	$ (328,170)
Cash received from sale of investment	$   280,680
Net cash used by investing activities		$ (201,260)
Cash flows from financing activities
Payment of cash dividend	$   (92,940)		23200-19880-96260
Cash received from issuance of common stock	$   192,200		153000-99000+418000-279800
Net cash provided by financing activities		$      99,260
Net Increase in cash and cash equivalents		$      39,310
Cash and cash equivalents at beginning of period		$   586,340
Cash and cash equivalents at end of period		$   625,650

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