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Statement of Cash Flows—Indirect Method The comparative balance sheet of Whitman Co. at December 31, 20Y2...

Statement of Cash Flows—Indirect Method

The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:

     Dec. 31, 20Y2      Dec. 31, 20Y1
Assets
Cash $ 925,710 $ 997,290
Accounts receivable (net) 842,400 768,340
Inventories 1,277,480 1,175,650
Prepaid expenses 29,620 35,180
Land 318,440 481,370
Buildings 1,471,880 907,200
Accumulated depreciation-buildings (416,570) (388,800)
Equipment 518,400 458,230
Accumulated depreciation-equipment (142,560) (160,150)
Total assets $4,824,800 $4,274,310
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors) $ 916,710 $ 967,370
Bonds payable 270,190 0
Common stock, $20 par 318,000 118,000
Paid-in capital: Excess of issue price over par-common stock 763,000 563,000
Retained earnings 2,556,900 2,625,940
Total liabilities and stockholders’ equity $4,824,800 $4,274,310

The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 20Y2 are as follows:

ACCOUNT Land ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 481,370
Apr. 20 Realized $151,500 cash from sale 162,930 318,440
ACCOUNT Buildings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 907,200
Apr. 20 Acquired for cash 564,680 1,471,880
ACCOUNT Accumulated Depreciation-Buildings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 388,800
Dec. 31 Depreciation for year 27,770 416,570
ACCOUNT Equipment ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 458,230
Jan. 26 Discarded, no salvage 50,400 407,830
Aug. 11 Purchased for cash 110,570 518,400
ACCOUNT Accumulated Depreciation-Equipment ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 160,150
Jan. 26 Equipment discarded 50,400 109,750
Dec. 31 Depreciation for year 32,810 142,560
ACCOUNT Bonds Payable ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
May 1 Issued 20-year bonds 270,190 270,190
ACCOUNT Common Stock, $20 par ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 118,000
Dec. 7 Issued 10,000 shares of common
stock for $40 per share
200,000 318,000
ACCOUNT Paid-in Capital in Excess of Par-Common Stock ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 563,000
Dec. 7 Issued 10,000 shares of common
stock for $40 per share
200,000 763,000
ACCOUNT Retained Earnings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 2,625,940
Dec. 31 Net loss 33,240 2,592,700
Dec. 31 Cash dividends 35,800 2,556,900

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Whitman Co.
Statement of Cash Flows
For the Year Ended December 31, 20Y2
Cash flows from operating activities:
$
Adjustments to reconcile net loss to net cash flow from operating activities:
Changes in current operating assets and liabilities:
Increase in inventories
Decrease in prepaid expenses
Decrease in accounts payable
Net cash flow used for operating activities $
Cash flows from (used for) investing activities:
Cash from land sold $
Cash used for acquisition of building
Cash used for purchase of equipment
Net cash flow used for investing activities
Cash flows from (used for) financing activities:
Cash from issuance of bonds payable $
Cash from issuance of common stock
Cash used for dividends
Net cash flow from financing activities
Decrease in cash $
Cash at the beginning of the year
Cash at the end of the year

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