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Statement of Cash Flows (Indirect Method) Use the following information regarding the Fremantle Corporation to prepare...

Statement of Cash Flows (Indirect Method)
Use the following information regarding the Fremantle Corporation to prepare a statement of cash flows using the indirect method:

Accounts payable increase $11,000
Accounts receivable increase 4,000
Accrued liabilities decrease 3,000
Amortization expense 26,000
Cash balance, January 1 22,000
Cash balance, December 31 117,000
Cash paid as dividends 49,000
Cash paid to purchase land 100,000
Cash paid to retire bonds payable at par 70,000
Cash received from issuance of common stock 75,000
Cash received from sale of equipment 17,000
Depreciation expense 69,000
Gain on sale of equipment 14,000
Inventory decrease 13,000
Net income 126,000
Prepaid expenses increase 2,000

Remember to use negative signs with answers when appropriate.

FREMANTLE CORPORATION
Statement of Cash Flows
For Year Ended December 31
Cash Flow from Operating Activities
Net Income Answer
Add (deduct) items to convert net income to cash basis
Depreciation Answer
Amortization Answer
Gain on Sale of Equipment Answer
Accounts Receivable Increase Answer
Inventory Decrease Answer
Prepaid Expenses Increase Answer
Accounts Payable Increase Answer
Accrued Liabilities Decrease Answer
Cash Flow Provided by Operating Activities Answer
Cash Flow from Investing Activities
Sale of Equipment Answer
Purchase of Land Answer
Cash Used by Investing Activities Answer
Cash Flow from Financing Activities
Issuance of Common Stock Answer
Retirement of Bonds Payable Answer
Payment of Dividends Answer
Cash Used by Financing Activities Answer
Net Increase in Cash Answer
Cash at Beginning of Year Answer
Cash at End of Year Answer

Solutions

Expert Solution

FREMANTLE CORPORATION
Statement of Cash Flows
For Year Ended December 31
Cash Flow from Operating Activities
Net Income 126000
Add (deduct) items to convert net income to cash basis
Depreciation 69000
Amortization 26000
Gain on Sale of Equipment -14000
Accounts Receivable Increase -4000
Inventory Decrease 13000
Prepaid Expenses Increase -2000
Accounts Payable Increase 11000
Accrued Liabilities Decrease -3000
Cash Flow Provided by Operating Activities 222000
Cash Flow from Investing Activities
Sale of Equipment 17000
Purchase of Land -100000
Cash Used by Investing Activities -83000
Cash Flow from Financing Activities
Issuance of Common Stock 75000
Retirement of Bonds Payable -70000
Payment of Dividends -49000
Cash Used by Financing Activities -44000
Net Increase in Cash 95000
Cash at Beginning of Year 22000
Cash at End of Year 117000

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