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Statement of Cash Flows—Indirect Method The comparative balance sheet of Yellow Dog Enterprises Inc. at December...

Statement of Cash Flows—Indirect Method

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 $60,170 $74,050
Accounts receivable (net) 92,460 99,830
Inventories 132,100 123,730
Prepaid expenses 5,380 3,750
Equipment 269,070 221,680
Accumulated depreciation-equipment (69,960) (54,370)
Total assets $489,220 $468,670
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors) $102,740 $97,950
Mortgage note payable 0 140,600
Common stock, $1 par 16,000 10,000
Paid-in capital in excess of par-common stock 234,000 132,000
Retained earnings 136,480 88,120
Total liabilities and stockholders’ equity $489,220 $468,670

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

  1. Net income, $123,800.
  2. Depreciation reported on the income statement, $33,990.
  3. Equipment was purchased at a cost of $65,790 and fully depreciated equipment costing $18,400 was discarded, with no salvage realized.
  4. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
  5. 6,000 shares of common stock were issued at $18 for cash.
  6. Cash dividends declared and paid, $75,440.

Required:

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

Yellow Dog Enterprises Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y8
Cash flows from (used for) 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 used for financing activities
$
Cash balance, January 1, 20Y8
Cash balance, December 31, 20Y8 $

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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