Question

Selected financial information for the Adelphi Company for the fiscal years ended December 31, 2018 and 2017 follows. Prepare a cash flow statement using the indirect method. Properly title the statement.

	2018	2017
Cash balance	$113,500	$37,500
Net income	142,500	162,000
Depreciation Expense	42,000	35,000
Purchase of Plant Assets	135,000	125,000
Disposal of Plant Assets	40,000	50,000
Gain (Loss) on Disposal of Plant Assets	(10,000)	5,000
Accounts Receivable Balance	64,500	58,000
Accounts Payable Balance	42,000	39,000
Interest Expense	8,000	6,000
Income Taxes Paid	35,000	28,000
Dividends Paid	30,000	25,000
Common Stock Issued for Cash	20,000	0

Answer 1

Adelphi Company
Statement of Cash Flows
For Year Ended December 31, 2018
Cash flow from Operating Activities
Net income	142,500
Add: Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense	42,000
Loss on disposal of plant assets	10,000
Increase in accounts receivable	-6,500
Increase in accounts payable	3,000
Net cash flow from Operating Activities		191,000
Cash flow from Investing Activities
Cash received from disposal of plant asset	30,000
Purchase of plant assets	-135,000
Net cash used in Investing Activities		-105,000
Cash flow from Financing Activities
Issuance of common stock	20,000
Dividend paid	-30,000
Net cash used in financing activities		-10,000
Net increase in Cash		76,000
Add: Cash in the beginning of the period		37,500
Cash at the end of the period		$113,500

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