Question

Statement of Cash Flows

The following are several items involving the cash flow activities of the ROCKY HORROR PICTURE CO. for 2016:

1. Net income, $58,000
2. Payment of dividends, $16,300
3. Ten-year, $32,100 bonds payable were issued at face value
4. Depreciation expense, $15,500
5. Building acquired at a cost of $30,800
6. Accounts receivable decreased by $2,700
7. Accounts payable decreased by $4,700
8. Equipment acquired at a cost of $6,500
9. Inventories increased by $7,000
10. Beginning cash balance, $15,300

Required:

Prepare Rocky Horror Picture's statement of cash flows for 2016 using the indirect method. Use a minus sign for any negative amounts.

ROCKY HORROR PICTURE CO.
Statement of Cash Flows
For Year Ended December 31, 2016
Net Cash Flow From Operating Activities
	$
Adjustments for differences between income flows and cash flows from operating activities:
		$
Cash Flows From Investing Activities
	$
Cash Flows From Financing Activities
	$
		$
		$

Answer 1

Answer)

ROCKY HORROR PICTURE CO.
Statement of Cash Flows
For the year ended December 31, 2016
Cash Flow from Operating Activities	Amount (In $)	Amount (In $)
Net Profit	58,000
Depreciation Expense	15,500
Changes in Current Assets and Current Liabilities:
Decrease of Accounts receivable	2,700
Decrease of Accounts payable	(4,700)
Increase in inventory	(7,000)
Net cash generated from (used in) operating activities (A)		64,500
Cash Flow from Investing Activities
Purchase of Building	(30,800)
Purchase of Equipment	(6,500)
Net cash generated from (used in) Investing activities (B)		(37,300)
Cash Flow from Financing Activities
Dividends Paid	(16,300)
Issue of Bonds	32,100
Net cash generated from (used in) Financing activities (C )		15,800
Net cash generated from (used in) Operating Activities, Investing Activities and Financing activities (A) + (B) + (C )		43,000
Opening Balance of cash and Cash Equivalents		15,300
Closing Balance of cash and Cash Equivalents		58,300