Question

The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:

		Dec. 31, 20Y8		Dec. 31, 20Y7
Assets
Cash		$80,300		$97,990
Accounts receivable (net)		123,380		132,100
Inventories		176,260		163,730
Prepaid expenses		7,180		4,960
Equipment		359,060		293,350
Accumulated depreciation-equipment		(93,350)		(71,940)
	Total assets	$652,830		$620,190
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)		$137,090		$129,620
Mortgage note payable		0		186,060
Common stock, $1 par		21,000		13,000
Paid-in capital: Excess of issue price over par-common stock		327,000		175,000
Retained earnings		167,740		116,510
	Total liabilities and stockholders’ equity	$652,830		$620,190

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:

Net income, $131,150.

Depreciation reported on the income statement, $45,760.

Equipment was purchased at a cost of $90,060, and fully depreciated equipment costing $24,350 was discarded, with no salvage realized.

The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.

8,000 shares of common stock were issued at $20 for cash.

Cash dividends declared and paid, $79,920

Net cash flow from operating activities $ Cash flows from investing activities: Cash paid for equipment $ Net cash flow used for investing activities Cash flows from financing activities: Cash received from sale of common stock $ Cash paid for dividends Cash paid to retire mortgage note payable Net cash flow used for financing activities Change in cash $ Cash at the beginning of the year Cash at the end of the year

Answer 1

Answer:-

Yellow Dog Enterprises Inc.
Statement of Cash Flow (Using Indirect Method)
For the year ended June 31,20Y8
Particulars		Amount
		$
Cash flow from operating activities
Net Income		131150
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation		45760
Change in operating assets & liabilities
Decrease in accounts receivable		8720
Increase in inventory		-12530
Increase in prepaid expenses		-2220
Increase in accounts payable		7470
Net cash flow from operating activities (a)		178350
Cash Flow from Financing activities
Dividends paid		-79920
Mortgage Notes paid		-186060
Common stock issued		160000
Net cash Flow from Financing activities (b)		-105980
Cash Flow from Investing activities
Equipment purchased		-90060
Net cash Flow from Investing activities (c)		-90060
Net Change in cash c=a+b+c		-17690
Beginning cash balance		97990
Closing cash balance		80300