Question

The following information is taken from French Corporation's financial statements:

		December 31
		2018			2017
Cash		$ 89,060			$ 32,940
Accounts receivable		124,440			97,600
Allowance for doubtful accounts		(5,490)			(3,782)
Inventory		189,100			213,500
Prepaid expenses		9,150			8,296
Land		122,000			73,200
Buildings		352,580			297,680
Accumulated depreciation		(39,040)			(15,860)
Patents		24,400			42,700
		$866,200			$746,274
Accounts payable		$ 109,800			$ 102,480
Accrued liabilities		65,880			76,860
Bonds payable		152,500			73,200
Common stock		122,000			122,000
Retained earnings―appropriated		97,600			12,200
Retained earnings―unappropriated		336,720			369,294
Treasury stock, at cost		(18,300)			(9,760)
		$866,200			$746,274

		For 2018 Year
Net income		$89,426
Depreciation expense		23,180
Amortization of patents		6,100
Cash dividends declared and paid		36,600
Gain or loss on sale of patents		none

Prepare a statement of cash flows for French Corporation for the year 2018. (Use the indirect method.)

Answer 1

French Corporation's
Statement of Cash flows
For the Year Ended December 31, 2018
Cash flows from operating activities
Net Income		$    89,426
Adjustments to reconcile net income to ;
Depreciation expense	$   23,180
Amortization expense	$      6,100
Increase in accounts receivable	$ (25,132)
Decrease in inventory	$   24,400
Increase in prepaid expense	$       (854)
Increase in accounts payable	$      7,320
Decrease in accrued liabilities	$ (10,980)
		$    24,034
Net cash provided by operating activities		$ 113,460
Cash flows from investing activities
Cash paid for purchase of building	$ (54,900)
Cash paid for purchase of land	$ (48,800)
Cash received from sale of patent	$   12,200
Net cash used by investing activities		$ (91,500)
Cash flows from financing activities
Cash paid for dividends	$ (36,600)
Cash paid for purchase of treasury stock	$   (8,540)
Cash received from issuance of bond	$   79,300
Net cash provided by financing activities		$    34,160
Net Increase in cash and cash equivalents		$    56,120
Cash and cash equivalents at beginning of period		$    32,940
Cash and cash equivalents at end of period		$    89,060

You can reach me over comment box if you have any doubts. Please rate this answer