Question

Condensed financial data of Ivanhoe Company follow.

Ivanhoe Company Comparative Balance Sheets December 31
Assets		2017			2016
Cash		$ 92,920			$ 55,660
Accounts receivable		100,970			43,700
Inventory		129,375			118,278
Prepaid expenses		32,660			29,900
Long-term investments		158,700			125,350
Plant assets		327,750			278,875
Accumulated depreciation		(57,500	)		(59,800	)
Total		$784,875			$591,963
Liabilities and Stockholders’ Equity
Accounts payable		$ 117,300			$ 77,395
Accrued expenses payable		18,975			24,150
Bonds payable		126,500			167,900
Common stock		253,000			201,250
Retained earnings		269,100			121,268
Total		$784,875			$591,963

Ivanhoe Company Income Statement Data For the Year Ended December 31, 2017
Sales revenue				$446,729
Less:
Cost of goods sold		$155,779
Operating expenses, excluding depreciation		14,272
Depreciation expense		53,475
Income tax expense		31,372
Interest expense		5,440
Loss on disposal of plant assets		8,625		268,963
Net income				$ 177,766

Additional information:

1.		New plant assets costing $115,000 were purchased for cash during the year.
2.		Old plant assets having an original cost of $66,125 and accumulated depreciation of $55,775 were sold for $1,725 cash.
3.		Bonds payable matured and were paid off at face value for cash.
4.		A cash dividend of $29,934 was declared and paid during the year.

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

Answer 1

Statement of Cash flow

Cash flow from operating activities
Net income	177766
Adjustment to reconcile net income to net Cash flow from operating activities
Depreciation expense	53475
Loss on disposal of plant assets	8625
Increase account receivable	-57270
Increase inventory	-11097
Increase prepaid expense	-2760
Increase account payable	39905
Decrease accrued expense payable	-5175
Net Cash flow from operating activities		203469
Cash flow from investing activities
Investment purchased	-33350
New plant assets purchased	-115000
Plant assets sold	1725
Net Cash flow from investing activities		-146625
Cash flow from financing activities
Dividend paid	-29934
Bond paid off	-41400
Issue Common Stock	51750
Net Cash used in financing activities		-19584
Net Cash flow		37260
Beginning Cash		55660
Ending Cash		92920