Question

In: Accounting

Burns Corporation's net income last year was $97,400. Changes in the company's balance sheet accounts for the year appear below:

Burns Corporation's net income last year was $97,400. Changes in the company's balance sheet accounts for the year appear below:


Increases
(Decreases)
Asset and Contra-Asset Accounts:


Cash and cash equivalents$19,300
Accounts receivable$13,500
Inventory$(16,800)
Prepaid expenses$4,400
Long-term investments$10,500
Property, plant, and equipment$75,600
Accumulated depreciation$32,200
Liability and Equity Accounts:


Accounts payable$(19,600)
Accrued liabilities$16,800
Income taxes payable$4,300
Bonds payable$(61,200)
Common stock$40,800
Retained earnings$93,200

The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $4,200.

Required:

a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.)

b. Prepare the investing activities section of the company's statement of cash flows for the year.

c. Prepare the financing activities section of the company's statement of cash flows for the year.




Operating activities:




Adjustments:































Investing Activities:








Financing Activities:










Solutions

Expert Solution

Cash flows from operating activities
Net Income   $     97,400
Adjustments to reconcile net income to ;
Depreciation expense $    32,200
Increase in accounts receivable $ (13,500)
Decrease in inventory $    16,800
Increase in prepaid expenses $    (4,400)
Decrease in accounts payable $ (19,600)
Increase in accrued liabilities $    16,800
Increase in income tax payable $       4,300
$     32,600
Net cash provided by operating activities $   130,000
Cash flows from investing activities
Cash paid for purchase of equipment $ (75,600)
Cash paid for purchase of long term investment $ (10,500)
Net cash provided by investing activities $   (86,100)
Cash flows from financing activities
Payment of dividends $    (4,200)
Cash received from issuance of common stock $    40,800
Cash paid to retire bonds $ (61,200)
Net cash provided by financing activities $   (24,600)

ekkarill92 answered 1 year ago
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