Question

Selected financial statement information and additional data for Doble Siete Inc. is presented below. Prepare a statement of cash flows for the year ending December 31, 2012

                                                                                                                                December 31

                                                                                                                2011                                       2012

Cash..........................................................     $42,000                                 $75,000

Accounts receivable (net)...........................       84,000                                 144,200

Inventory..................................................     168,000                                 201,600

Land..........................................................       58,800                                   16,000

Equipment.................................................     504,000                                789,600

TOTAL............................................ $856,800                           $1,226,400

Accumulated depreciation..........................     $84,000                              $115,600

Accounts payable.......................................       50,400                                   86,000

Notes payable - Short-term........................       67,200                                   29,400

Notes payable - Long-term.........................     168,000                                 302,400

Common stock...........................................     420,000                                 487,200

Retained earnings......................................       67,200                                205,800

TOTAL............................................ $856,800                            $1,226,400

Additional data for 2012:

1.    Net income was $240,200.

2.    Depreciation was $31,600.

3.    Land was sold at its original cost.

4.    Dividends of $101,600 were paid.

5.    Equipment was purchased for $84,000 cash.

6.    A long-term note for $201,600 was used to pay for an equipment purchase.

7.    Common stock was issued to pay a $67,200 long-term note payable.

Required:

Prepare Cash Flow (Indirect Method) in Excel format.

Answer 1

Answer:

Cash Flow statement
Cash Flow from Operating Activities
Net Income before tax		$       240,200
Adjustments to be made:
Depreciation	$    31,600
Increase in Account receivable	$ (60,200)
Increase in Inventory	$ (33,600)
Increase in Accounts payable	$    35,600	$        (26,600)
Cash Flow from Operating Activities		$       213,600
Cash Flow from Investing Activities
Sale of land	$    42,800
Purchase of equipment	$ (84,000)
		$        (41,200)
Cash Flow from Investing Activities		$        (41,200)
Cash Flow from Financing Activities
Notes repaid	$ (37,800)
Notes issued	$             -
Common stock issued	$             -
Dividends	$(101,600)
		$      (139,400)
Cash Flow from Financing Activities		$      (139,400)
Total cash Flows		$         33,000
Add: Opening Cash		$          42,000
Closing Cash		$         75,000

In case of any doubt, please comment.