In: Accounting
Burns Corporation's net income last year was $96,500. Changes in the company's balance sheet accounts for the year appear below:
Increases (Decreases) |
|||
Asset and Contra-Asset Accounts: | |||
Cash and cash equivalents | $ | 18,600 | |
Accounts receivable | $ | 13,300 | |
Inventory | $ | (16,300 | ) |
Prepaid expenses | $ | 4,300 | |
Long-term investments | $ | 10,300 | |
Property, plant, and equipment | $ | 74,200 | |
Accumulated depreciation | $ | 31,600 | |
Liability and Equity Accounts: | |||
Accounts payable | $ | (19,400 | ) |
Accrued liabilities | $ | 17,600 | |
Income taxes payable | $ | 4,200 | |
Bonds payable | $ | (63,600 | ) |
Common stock | $ | 41,600 | |
Retained earnings | $ | 92,400 | |
The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $4,100.
Required:
a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.)
b. Prepare the investing activities section of the company's statement of cash flows for the year.
c. Prepare the financing activities section of the company's statement of cash flows for the year.
Answer:-a)- The operating activities section of the company's statement of cash flows for the year,(using the indirect method.)=$129200
b)- The investing activities section of the company's statement of cash flows for the year= -$84500
c)- The financing activities section of the company's statement of cash flows for the year= -$26100
Explanation:-
Burns Corporation | ||
Statement of Cash Flow (Using Indirect Method) | ||
For the year ended | ||
Particulars | Amount | |
$ | ||
Cash flow from opreating activities | ||
Net Income | 96500 | |
Adjustments to reconcile net income to net cash provided by opreating activities | ||
Adjustment for non cash effects | ||
Depreciation | 31600 | |
Change in opreating assets & liabilities | ||
Increase in accounts receiveble | -13300 | |
Decrease in inventory | 16300 | |
Increase in prepaid expenses | -4300 | |
Decrease in accounts payable | -19400 | |
Increase in accrued liabilities | 17600 | |
Increase in income tax payable | 4200 | |
Net cash flow from opreating activities (a) | 129200 | |
Cash Flow from Financing activities | ||
Cash dividend paid | -4100 | |
Bonds paid | -63600 | |
Common stock issued | 41600 | |
Net cash Flow from Financing activities (b) | -26100 | |
Cash Flow from Investing activities | ||
Purchase of long term investments | -10300 | |
Purchase of property, plant & equipment | -74200 | |
Net cash Flow from Investing activities (c) | -84500 | |
Net Channge in cash c=a+b+c | 18600 |