Question

Using the financial data below, prepare a statement of cash flows for the year ended December 31, 2014 for Summer Peebles, Inc. using the indirect method.

Include the Excel spreadsheet picture with all calculations.

Summer Peebles, Inc.
Income Statement Year Ending December 31, 2014

Sales	$1,000.00
Cost of Goods Sold	-$650.00
Depreciation Expense	-$100.00
Sales and General Expense	-$100.00
Interest Expense	-$50.00
Income Tax Expense	-$40.00
Net Income	$60.00

Summer Peebles, Inc.
Balance Sheets as of December 31, 2013 and 2014

Assets	2013	2014
Cash	$50.00	$60.00
Accounts Receivable, Net	$500.00	$520.00
Inventory	$750.00	$770.00
Current Assets	$1,300.00	$1,350.00
Fixed Assets, Net	$500.00	$550.00
Total Assets	$1,800.00	$1,900.00
Liabilities and Equity
Notes Payable to Banks	$100.00	$75.00
Accounts Payable	$590.00	$615.00
Interest Payable	$10.00	$20.00
Current Liabilities	$700.00	$710.00
Long-Term Debt	$300.00	$350.00
Deferred Income Tax	$300.00	$310.00
Capital Stock	$400.00	$400.00

PLEASE INCLUDE STEP BY STEP CALCULATIONS. Thank you!

Answer 1

STATEMENT OF CASH FLOW
	Amount in $	Amount in $
Net income		$                      60
Cash flows from operating activities
Adjustments for:
Depreciation of the year	$                   100
		$                   100
Effects/ changes in Assets & Liabilities
(Increase) / Decrease in Account receivables	$                    -20
Inventory Decrease / (Increase)	$                    -20
Accounts payable Increase / ( Decrese)	$                      25
Deferred Income tax	$                      10
Interest Payable	$                      10
		$                        5
Net cash from operating activities		$                   165
Cash flows from investing activities
Purchase of Fixed Assets	$                    -50
Net cash used in investing activities		$                    -50
Cash flows from Financing activities
Repayment of Note Payable	$                    -25
Long term Debt	$                      50
Dividend Paid	$                  -130
Net cash used in financing activities		$                  -105
Net increase in cash and cash equivalents		$                      10
Add :Cash and cash equivalents at beginning of period		$                      50
Cash and cash equivalents at end of period		$                      60
CALCULATION OF DIVIDEND PAIS =
Net increase in cash Balance ($ 60-$ 50)=	$                      10
Less: Net increase in cash excluding dividend	$                   140
( $ 165 + (-$ 50) + $ 25)
Net increase in cash =	$                  -130
So this difference is due to dividend paid =	$                  -130