Question

The comparative balance sheet for Astro Company for the current year and the preceding year are presented below:

Current Preceding

Year Year

Assets

Cash---------------------------------------- $ 52,100 $ 42,500

Accounts receivable (net)-------------------    91,350    61,150

Inventories--------------------------------- 104,500 109,500

Prepaid expenses--------------------------------      3,600      2,700

Land---------------------------------------    50,000    50,000     

Equipment---------------------------------- 580,000 500,000

Accumulated depreciation------------------- (212,600) (175,400)

Patents--------------------------------------    35,000    40,000

Total Assets            $703,950            $630,450

======= =======

Liabilities and Stockholder’s Equity

Accounts payable-------------------------- $ 61,150 $ 75,000

Dividends payable-------------------------    12,000    10,000

Salaries payable----------------------------      6,650      7,550

Mortgage note payable, due 20x9----------    50,000        0

Bonds payable-----------------------------        0   75,000

Common stock, $20 par------------------- 300,000 250,000

Premium on common stock----------------- 100,000    75,000

Retained earnings--------------------------- 174,150 137,900

Total Liabilities and Stockholder’s Equity  $703,950            $630,450

====== =======

An examination of the income statement and the accounting records revealed the following additional information applicable to the current year:

1. Net income, $96,250.
2. Depreciation expense reported on the income statement $37,200.
3. Patent amortization reported on the income statement $5,000.
4. A mortgage note for $50,000 was issued for cash.
5. Equipment was purchased for $80,000 cash.
6. 2,500 shares of common stock were issued at a premium for $30 per share cash.
7. Bonds payable were retired for cash.
8. Cash dividends declared, $60,000

Continued next page:

REQUIRED: Using the form provided below, prepare a statement of cash flow using the indirect method.

Present your answers in the exact same format as below describing each section and sub-section.

Cash Flows From Operating Activities:

Net Income(Loss)

Items Affecting Net Income But Not Cash:

Add:

Add:

Add:

Deduct:

Current Assets & Current Liabilities:

Add: Increase in

Add: Increase in

Add: Decrease in

Add: Decrease in

Deduct: Increase in

Deduct: Increase in

Deduct: Decrease in

Deduct: Decrease in__________________________               

Net Cash______(Flow or Used)From Operating Activities-----------------

Cash Flows From Investing Activities:

Add: Sale of

Add: Sale of

Deduct: Purchase of

Deduct: _Purchase of_______________________________________________

Net Cash_________(Flow or Used) From Investing Activities-----------------------------

Cash Flows from Financing Activities:

Add: Issuance of

Add: Issuance of

Add: Issuance of

Deduct: Retirement of

Deduct: Payment of

Deduct:_Payment of_______________________________________

Net Cash_________(Flow or Used) From Financing Activities-----------------------------

Net Increase (Decrease) In Cash______________

Answer 1