Question

The comparative balance sheets of Sheridan Inc. at the beginning and the end of the year 2017 are as follows.

SHERIDAN INC. BALANCE SHEETS
		Dec. 31, 2017		Jan. 1, 2017		Inc./Dec.
Assets
Cash		$ 46,260		$ 14,260		$32,000	Inc.
Accounts receivable		94,980		90,720		4,260	Inc.
Equipment		42,980		24,720		18,260	Inc.
Less: Accumulated Depreciation-Equipment		20,980		11,000		9,980	Inc.
Total		$163,240		$118,700
Liabilities and Stockholders’ Equity
Accounts payable		$ 23,980		$ 17,720		6,260	Inc.
Common stock		101,260		82,720		18,540	Inc.
Retained earnings		38,000		18,260		19,740	Inc.
Total		$163,240		$118,700

Net income of $47,980 was reported, and dividends of $28,240 were paid in 2017. New equipment was purchased and none was sold.

Prepare a statement of cash flows for the year 2017. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

SHERIDAN INC.
Cash Flow Statement
For the year ended December 31 2017
A. Cash Flows from Operating Activity
Net Income		$      47,980.00
Adjustments to reconcile net income to net cash flows from operating activities
Depreciation expense	$        9,980.00
Change in Current Operating Assets and Liabilities
Increase in Accounts receivables	$      (4,260.00)
Increase in Accounts Payable	$        6,260.00
		$      11,980.00
Net cash flow from Operating activities		$      59,960.00
B. Cash flows from Investing Activities
Cash paid for Equipment	$    (18,260.00)
Net Cash flows from Investing activities		$    (18,260.00)
C. Cash Flows from Financing activities
Dividends Paid	$    (28,240.00)
Cash received from stock issuance	$      18,540.00
Cash flows from Financing activities		$      (9,700.00)
Net Increase (Decrease) in Cash [A+B+C]		$      32,000.00
Cash at the beginning of the period		$      14,260.00
Cash at the end of the period		$      46,260.00

Depreciation is the difference between Beginning and ending balances of Accumulated depreciation accounts