Question

The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as follows:

		Dec. 31, 20Y3		Dec. 31, 20Y2
Assets
Cash		$262,580		$246,510
Accounts receivable (net)		95,120		88,540
Inventories		268,530		262,130
Investments		0		101,560
Land		137,730		0
Equipment		296,270		231,760
Accumulated depreciation—equipment		(69,360)		(62,500)
	Total assets	$990,870		$868,000
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)		$179,350		$171,000
Accrued expenses payable (operating expenses)		17,840		22,570
Dividends payable		9,910		7,810
Common stock, $10 par		53,510		42,530
Paid-in capital: Excess of issue price over par-common stock		201,150		118,050
Retained earnings		529,110		506,040
	Total liabilities and stockholders’ equity	$990,870		$868,000

Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:

The investments were sold for $118,830 cash.

Equipment and land were acquired for cash.

There were no disposals of equipment during the year.

The common stock was issued for cash.

There was a $63,870 credit to Retained Earnings for net income.

There was a $40,800 debit to Retained Earnings for cash dividends declared.

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 out flows, cash payments, decreases in cash, or any negative adjustments.

Livers Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y3
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 investing activities:
	$
Net cash flow used for investing activities
Cash flows from financing activities:
	$
Net cash flow from financing activities
		$
Cash at the beginning of the year
Cash at the end of the year		$

Answer 1

Cash flow from operating activities
net income for the year					63,870
adjustments to reconcile net income to
net cash flow from operating activities
Depreciation expense					6860
Gain on sale of investments					-17270
increase in accounts receivable					-6580
increase in inventories					-6400
increase in accounts payable					8350
Decrease in accrued expenses payable					-4730
net cash flow from operating activities						44,100
Cash flow from investing activities
cash from sale of investment					118,830
purchase of land					-137,730
purchase of Equipment					-64510
Net cash used by investing activities						-83,410
Cash flow from financing activities
cash from stock issue					94080
cash dividend					-38700
net cash flow from financing activities						55,380
net increase in cash						16,070
cash at the beginning of the year						246,510
cash at year end						262,580