Question

Statement of Cash Flows—Indirect Method

The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:

Dec. 31, 20Y8 Dec. 31, 20Y7
Assets
Cash $61,880 $76,070
Accounts receivable (net) 95,080 102,550
Inventories 135,830 127,100
Prepaid expenses 5,530 3,850
Equipment 276,690 227,720
Accumulated depreciation-equipment (71,940) (55,850)
Total assets $503,070 $481,440

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors) $105,640 $100,620
Mortgage note payable 0 144,430
Common stock, $1 par 16,000 10,000
Paid-in capital: Excess of issue price over par-common stock 226,000 136,000
Retained earnings 155,430 90,390
Total liabilities and stockholders’ equity $503,070 $481,440

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:

Net income, $166,500.
Depreciation reported on the income statement, $34,990.
Equipment was purchased at a cost of $67,870, and fully depreciated equipment costing $18,900 was discarded, with no salvage realized.
The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
6,000 shares of common stock were issued at $16 for cash.
Cash dividends declared and paid, $101,460.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Yellow Dog Enterprises Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y8
Cash flows from operating activities:
$
Adjustments to reconcile net income to net cash flow from operating activities:

Changes in current operating assets and liabilities:




Net cash flow from operating activities $
Cash flows from investing activities:
$
Net cash flow used for investing activities
Cash flows from financing activities:
$


Net cash flow used for financing activities
$
Cash at the beginning of the year
Cash at the end of the year $

Answer 1

Answer:-

Yellow Dog Industries
Statement of Cash Flow (Using Indirect Method)
For the year ended December 31,2018
Particulars		Amount
		$
Cash flow from operating activities
Net Income		166500
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation		34990
Change in operating assets & liabilities
Decrease in accounts receivable		7470
Increase in inventory		-8730
Increase in prepaid expenses		-1680
Increase in accounts payable		5020
Net cash flow from operating activities (a)		203570
Cash Flow from Financing activities
Cash Dividends paid		-101460
Note payable paid		-144430
Common stock issue		96000
Net cash Flow from Financing activities (b)		-149890
Cash Flow from Investing activities
Purchase of equipment		-67870
Net cash Flow from Investing activities (c)		-67870
Net Channge in cash c=a+b+c		-14190
Beginning cash balance		76070
Closing cash balance		61880