Question

The financial statements of Pouchie Co. included the following information for the year ended December 31, 2016 (amountsin millions Depreciation and amortization expense $260
Cash dividends declared and paid		343
Purchase of equipment		818
Net income		396
Beginning cash balance		128
Proceeds of common stock issued		171
Proceeds from sale of building (at book value)		215
Accounts receivable increase		16
Ending cash balance		92
Inventory decrease		45
Accounts payable increase		54

Required:

Complete the following statement of cash flows, using the indirect method. (Amounts to be deducted should be indicated by a minus sign. Enter your answers in millions (i.e., 5,000,000 should be entered as 5).)

Answer 1

Pouchie Co.
Statement of Cash Flows
For the year ended December 31, 2016
Cash flows from operating activities;
Net income	$396
Adjustments;
+ Depreciation and amortization expense	$260
+ Inventory decrease	$45
+ Accounts payable increase	$54
- Accounts receivable increase	($16)
Net cash provided (used) by operating activities	$739
Cash flows from investing activities;
Proceeds from sale of building	$215
- Purchase of equipment	($818)
Cash provided (used) from investing activities	($603)
Cash flows from financing activities;
Proceeds of common stock issued	$171
- Cash dividends declared and paid	($343)
Cash provided (used) from financing activities	($172)
Net cash increase (decrease) in cash for the year	($36)
+ Beginning balance of cash	$128
Ending balance of cash	$92