Question

2. Statement of Cash Flows—Indirect Method

The comparative balance sheet of Harris Industries Inc. at December 31, 20Y4 and 20Y3, is as follows:

		Dec. 31, 20Y4		Dec. 31, 20Y3
Assets
Cash		$443,240		$360,920
Accounts receivable (net)		665,280		592,200
Inventories		887,880		1,022,560
Prepaid expenses		31,640		25,200
Land		302,400		302,400
Buildings		1,713,600		1,134,000
Accumulated depreciation—buildings		(466,200)		(414,540)
Machinery and equipment		781,200		781,200
Accumulated depreciation—machinery and equipment		(214,200)		(191,520)
Patents		106,960		112,000
	Total assets	$4,251,800		$3,724,420
Liabilities and Stockholders' Equity
Accounts payable		$837,480		$927,080
Dividends payable		32,760		25,200
Salaries payable		78,960		87,080
Mortgage note payable, due in 10 years		224,000		0
Bonds payable		0		390,000
Common stock, $5 par		200,400		50,400
Paid-in capital: Excess of issue price over par—common stock		366,000		126,000
Retained earnings		2,512,200		2,118,660
	Total liabilities and stockholders' equity	$4,251,800		$3,724,420

An examination of the income statement and the accounting records revealed the following additional information applicable to 20Y4:

1. Net income, $524,580.
2. Depreciation expense reported on the income statement: buildings, $51,660; machinery and equipment, $22,680.
3. Patent amortization reported on the income statement, $5,040.
4. A building was constructed for $579,600.
5. A mortgage note for $224,000 was issued for cash.
6. 30,000 shares of common stock were issued at $13 in exchange for the bonds payable.
7. Cash dividends declared, $131,040.

Required:

Prepare a statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Harris Industries Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y4
Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities		$
Cash flows from (used for) investing activities:
	$
Net cash flow used for investing activities
Cash flows from (used for) financing activities:
	$
Net cash flow from financing activities
		$
Cash at the beginning of the year
Cash at the end of the year		$
Schedule of Noncash Financing and Investing Activities:
		$

Answer 1