Question

Prepare the operating section of cash flows statement on 31-dec (using the indirect method) you have the following information

balances on 30-11 , 31-12 respectively

Cash $ 249,930

$264,343

Petty cash 150,

255

Accounts receivable, 317,420

260000

Allowance for uncollectibles, $ 4,580

111300

Notes receivable 45,000

104200

Interest receivable 0

1800

Inventory 531,960,

440000

Office supplies 2,320

830

Prepaid insurance 11,020,

5640

Prepaid rent 25,410,

18150

Bond sinking fund 145,000

160000

Land 43,000

99650

Buildings 306,000

306000

Accumulated depreciation - Buildings 73,040

70500

Trucks and lifts 78,400

70500

Accumulated depreciation - Trucks and lifts 39,540

47891

Furniture and equipment 32,800

38900

Accumulated depreciation - Furniture and equipment 13,200

18210

Notes payable 15,000

15000

Accounts payable 126,850

171549

Salaries and wages payable 1,906

3971

FICA Taxes payable 1,787

6520

Federal withholding taxes payable , 9,573 , 10199

State withholding taxes payable 2,486

4636

Federal unemployment taxes payable 400,,, 400

State unemployment taxes payable 2,600,, 2600

Dividends payable 0 , 14310

Interest payable 0 , 5890

Income taxes payable 0 15548

Mortgage notes payable 113,000

Bonds payable (issued March 1, 2013) 275,000 ,, 275000

discount on bonds payable 4400

net profit= 179199

Answer 1

Operating Section of Cash Flows Statement (Indirect Method):

Particulars	$	$
Net Income		179,199
Adjustments:
Increase in Cash (264,343-249,930)	(14,413)
Increase in Petty Cash (255-150)	(105)
Decrease in Accounts Receivable (312,840-148,700)	57,420
Increase in Notes Receivable (104,200-45,000)	(59,200)
Increase in Interest Receivable	(1,800)
Decrease in Inventory (531,960-440,000)	91,960
Decrease in Prepaid Insurance (11,020-5,640)	5,380
Decrease in Prepaid Rent (25,410-18,150)	7,260
Depreciation Expense - Building (70,500-73,040)	(2,540)
Depreciation Expense - Trucks (47,891-39,540)	8,351
Depreciation Expense - Furniture (18,210-13,200)	5,010
Increase in Accounts Payable (171,549-126,850)	44,699
Increase in Salaries & Wages Payable (3,971-1,906)	2,065
Increase in FICA Taxes Payable (6,520-1,787)	4,733
Increase in Federal Taxes Payable (10,199-9,573)	626
Increase in State Taxes Payable (4,636-2,486)	2,150
Increase in Dividends Payable	14,310
Increase in Interest Payable	5,890
Increase in Income Taxes Payable	15,548
Decrease in Mortgage Notes Payable	(113,000)
Decrease in Discount on Bonds Payable	(4,400)
		69,944
Net Cash Flows from Operating Activities		249,143

Note: Assumed Mortgage Notes Payable & Discount on Bonds Payable beginning balances are given and that ending balances are zero.