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Newman Corporation's comparative balance sheets are presented below. Newman Corporation Comparative Balance Sheet December 31 Assets...

Newman Corporation's comparative balance sheets are presented below. Newman Corporation Comparative Balance Sheet December 31 Assets 2020 2019 Cash $15,200 $17,700 Accounts receivable 25,200 22,300 Investments (long-term) 20,000 16,000 Equipment 60,000 70,000 Accumulated depreciation (14,000) (10,000) Total Assets $106,400 $116,000 Liabilities & Stockholder Equity Accounts payable $14,600 $11,100 Bonds payable 10,000 30,000 Common stock ($1 par) 50,000 45,000 Retained earnings 31,800 29,900 Total Liabilities & Stockholder Equity $106,400 $116,000 Additional information: 1. Net income was $18,300. Dividends declared and paid were $16,400. 2. Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $3,300. 3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. Instruction Prepare a statement of cash flows for 2020 using the indirect method.

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Expert Solution

Cash Flow Statement - Newman Corporation
Indirect Method
Cash Flow From Operating Activities
Net Income $18,300.00
Adjustments
Add: Depreciation (14000-(10000-1200)) $5,200.00
Add: Loss on Sale of Equipment (3300-(10000-1200) $5,500.00
Less: Increase In Accounts Receivables -$2,900.00
Add: Increase In Accounts Payable $3,500.00
$11,300.00
Cash Flow From Operating Activities $29,600.00
Cash Flow From Investing Activities
Sale Proceeds Of Equipment $3,300.00
Purchase investment -$4,000.00
Cash Flow From Investing Activities -$700.00
Cash Flow From Financing Activities
Retirement of Bond -$20,000.00
Issuance of Stock $5,000.00
Cash Dividends Paid -$16,400.00
Cash Flow From Financing Activities -$31,400.00
Net Cash Flow For The Year -$2,500.00
Add:Beginning Cash Balance $17,700.00
Ending Cash Balance $15,200.00

ekkarill92 answered 1 year ago
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