Question

Statement of Cash Flows

The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:

	Dec. 31, 20Y2			Dec. 31, 20Y1
Assets
Cash	$ 809,890			$ 870,440
Accounts receivable (net)	737,000			672,210
Inventories	1,117,650			1,028,560
Prepaid expenses	25,920			30,780
Land	278,600			421,140
Buildings	1,287,730			793,690
Accumulated depreciation-buildings	(364,450)			(340,150)
Equipment	453,540			400,900
Accumulated depreciation-equipment	(124,720)			(140,110)
Total assets	$4,221,160			$3,737,460
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$ 802,020			$ 846,340
Bonds payable	236,380			0
Common stock, $20 par	279,000			103,000
Excess of paid-in capital over par	668,000			492,000
Retained earnings	2,235,760			2,296,120
Total liabilities and stockholders’ equity	$4,221,160			$3,737,460

The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 20Y2 are as follows:

ACCOUNT Land				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance			421,140
Apr. 20	Realized $132,600 cash from sale		142,540	278,600

ACCOUNT Buildings				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance			793,690
Apr. 20	Acquired for cash	494,040		1,287,730

ACCOUNT Accumulated Depreciation-Buildings				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				340,150
Dec. 31	Depreciation for year		24,300		364,450

ACCOUNT Equipment				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance			400,900
Jan. 26	Discarded, no salvage		44,100	356,800
Aug. 11	Purchased for cash	96,740		453,540

ACCOUNT Accumulated Depreciation-Equipment				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				140,110
Jan. 26	Equipment discarded	44,100			96,010
Dec. 31	Depreciation for year		28,710		124,720

ACCOUNT Bonds Payable				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
May 1	Issued 20-year bonds		236,380		236,380

ACCOUNT Common Stock, $20 par				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				103,000
Dec. 7	Issued 8,800 shares of common stock for $40 per share		176,000		279,000

ACCOUNT Paid-in Capital in Excess of Par-Common Stock				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				492,000
Dec. 7	Issued 8,800 shares of common stock for $40 per share		176,000		668,000

ACCOUNT Retained Earnings				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				2,296,120
Dec. 31	Net loss	29,060			2,267,060
Dec. 31	Cash dividends	31,300			2,235,760

Required:

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

Whitman Co.
Statement of Cash Flows
For the Year Ended December 31, 20Y2
Cash flows from (used for) operating activities:
	$fill in the blank 2
Adjustments to reconcile net loss to net cash flows from (used for) operating activities:
	fill in the blank 4
	fill in the blank 6
Changes in current operating assets and liabilities:
	fill in the blank 8
	fill in the blank 10
	fill in the blank 12
	fill in the blank 14
Net cash flows used for operating activities		$fill in the blank 15
Cash flows from (used for) investing activities:
	$fill in the blank 17
	fill in the blank 19
	fill in the blank 21
Net cash flows used for investing activities		fill in the blank 22
Cash flows from (used for) financing activities:
	$fill in the blank 24
	fill in the blank 26
	fill in the blank 28
Net cash flows from financing activities		fill in the blank 29
		$fill in the blank 31
Cash balance, January 1, 20Y2		fill in the blank 32
Cash balance, December 31, 20Y2		$fill in the blank 33

Answer 1

Whitman Co.
Statements of cash flow
For the Year Ended December 31, 20Y2
Cash flows from (used for) operating activities:
Net income (loss)		(29,060)
Adjustments to reconcile net loss to net cash flows from
Add: Depreciation expense - Buildings	24,300
Add: Depreciation expense - equipment	28,710
Add: Loss on sale of land (142540-132600)	9,940
Changes in current operating assets and liabilities:
Increase in Account Receivable (Less) (672210-737000)	(64,790)
Increase in Inventory (Less) (1028560-1117650)	(89,090)
Decrease in Prepaid expense (Add) (30780-25920)	4,860
Decrease in Accounts Payable (Less) (802020-846340)	(44,320)
Adjustments to reconcile		(130,390)
Net cash flow used by operating activity		(159,450)
Cash flows from (used for) investing activities:
Sales Proceeds of Land	132,600
Payment for Purchase of Buildings	(494,040)
Payment for Purchase of equipment	(96,740)
Net cash flow used by Investing activity		(458,180)
Cash flows from (used for) financing activities:
Proceed from issued of Bond Payable	236,380
Proceed from issued of common stock (176000+176000)	352,000
Cash dividends	(31,300)
Net cash flow provided by Financing activity		557,080
Decrease in cash		(60,550)
Add: Cash balance, January 1, 20Y2		870,440
Cash balance, December 31, 20Y2		809,890