Question

Addedlong term debt of :	$3,75,000
			Sale of PPE:Accum deprec. =	$70,000
			Sale of PPE: Sold for:	$65,000
			Sale of PPE: Cost = $110 000	$1,10,000
			Other comprehensive income in equity increased , offset in Other current assets	$44,000
			Used Treasury Stock to buy PPE	$54,000
			Issued/sold common stock :	$8,00,000
			Paid dividend of	$60,000
			No additions to Goodwill
HW Problem	Prepare Cash Flow Statement; Indirect Method
	Class Company, Inc.
		Balance Sheet as of
	Assets:	12/31/2xx2	12/31/2xx1
	Current Assets:	$s	$s
	Cash	13,54,000	1,93,000
	Accounts Receivable	4,50,000	4,18,000
	Prepaid Expenses	44,000	19,000
	Other Current Assets	55,000	32,000
	Total Current Assets:	19,03,000	6,62,000
	Plant Property & Equipment	12,00,000	9,70,000
	Accumulated Depreciation	5,50,000	4,50,000
	Net Plant Property & Equipment	6,50,000	5,20,000
	Other Non-Current Assets:
	Goodwill	6,10,000	6,10,000
	Deferred Loan Placement Costs	25,000	25,000
	Other Non-Current assets	72,000	81,000
	Total Other Non-Current Assets	7,07,000	7,16,000
	Total Assets	32,60,000	18,98,000
	Liabilities:
	Current Liabilities
	Accounts Payable	1,29,000	1,39,000
	Accrued Expenses	60,000	72,000
	Current Portion of LT debt	90,000	1,00,000
	Other Current Liabilities	40,000	30,000
	Total Current Liabilities	3,19,000	3,41,000
	Non-Current Liabilities
	Long Term Debt	11,00,000	9,15,000
	Deferred Income Taxes	1,05,000	86,000
	Other Non-current Liabilities	14,000	12,000
	Total Non-Current Liabilities	12,19,000	10,13,000
	Total Liabilities	15,38,000	13,54,000
	Owners Equity
	Paid-in Capital	10,00,000	2,00,000
	Treasury Stock	26,000	80,000
	Dividends paid [before closing entries]	60,000	0
	Other comprehensive income	68,000	24,000
	Retained Earnings	7,40,000	4,00,000
	Total Owners' Equity	17,22,000	5,44,000
	Total Liabilities and Owners Equity	32,60,000	18,98,000
		0	0
	Class Company, Inc.	Statement of Income
		Period Ending 12/31/2xx2
		$s	$s
	Revenue	45,00,000	100.0%
	Cost of Goods Sold	23,00,000	51.1%
	Gross Profit	22,00,000	48.9%
	Operating Expenses:
	Total Operating Expenses	17,00,000	24.5%
	Operating Income	5,00,000	11.1%
	Other Income ( net of (expense))	60,000	1.3%
	Income Before Taxes	5,60,000	12.4%
	Provision for Income Taxes	2,20,000	4.9%
	Net Income	3,40,000	7.6%

Answer 1

Cash Flow Statement under Indirect method

Particulars	Amount	Amount
Cash flows from operating activities
Net income		560000
Adjustments to reconcile net income
Depreciation of Fixed assets(550000-450000)	100000
Profit on Sale of PPE(65000-(110000-70000))	(25000)
Dividend paid	60000
Net adjustments		135000
Adjusted net income		695000
Increase in accounts receivable(450000-418000)	(22000)
Increase in prepaid expenses((44000-19000)	(25000)
Increase in other current assets(55000-32000)	(23000)
Decrease in Accounts payables(139000-129000)	(10000)
Decrease in Accrued expenses(42000-30000)	(12000)
Decrease in Current LT Debt(100000-90000)	(10000)
Increase in Other Current liabilities(40000-30000)	10000	(92000)
Cash Flows from Operating activities		603000
Cash Flows from Investing activities
Purchase of PPE(1200000-970000+110000)	(340000)
Sale proceeds from PPE	65000
Decrease in other non current assets(81000-72000+44000)	53000	(222000)
Cash Flows from Investing Activites		381000
Cash Flows from Financing Activities
Increase in Long term Debt	375000
Repayment of Debt	(190000)
Increase in Paid up share capital	800000
Increase in Treasury Stock	54000
Dividend paid	(60000)
Increase in retained earnings and other liabilities	(199000)	780000
Net Cash flows after financing activities		1161000
Add: Opening cash balance		193000
Closing cash balance		1354000