Question

Additional Information:
	A.   Sold plant assets with a cost of $75,000 and accumulated depreciation of $7,500,
	yielding a gain of disposal of plant assets of $12,000.
	B.   Purchased plant assets by paying cash.
	C.   Issued Notes Payable for Cash.
	D.   Sold investment in Walking Dead Co at cost (zero gain/loss).
	E.   Issued Common Stock for Cash.
	F.   Purchased Treasury Stock for Cash.
	Requirements:
	Prepare, in good form, a Statement of Cash Flows using the indirect method.

	Statement of Cash Flows
	Angela's Cleaning Consortium				Seymour-Johnson, Inc.
	Comparative Balance Sheet				Income Statement
	December 31, 2020 and 2019				For the Year Ended December 31, 2020
		2020	2019		Net sales		$ 386,000
	ASSETS				Cost of goods sold		(212,000)
	Current assets				Gross profit		174,000
	Cash	$    66,500	$    62,000		Operating expenses
	Accounts receivable	95,000	113,000		Salaries and wages expense		(66,000)
	Merchandise inventory	172,000	165,000		Depreciation expense		(25,000)
	Total current assets	333,500	340,000		Other operating expenses		(28,000)
	Long-term investments				Income from operations		55,000
	Investment in Walking Dead Co.	-	50,000		Other revenues and gains
	Property, buildings, and equipment	507,000	304,000		Interest revenue		15,000
	Less: Accumulated depreciation	(59,500)	(42,000)		Dividend revenue		9,700
	Total assets	$ 781,000	$ 652,000		Gain on disposal of plant assets		12,000
	Liabilities and Stockholders' Equity				Other expenses and losses
	Current liabilities				Interest expense		(15,000)
	Accounts payable	$ 144,000	$ 175,000		Income before income taxes		76,700
	Accrued liabilities	17,000	47,000		Income tax expense		(14,000)
	Total current assets	161,000	222,000		Net Income		$    62,700
	Long-term Liabilities
	Notes payable, long-term	160,000	90,000
	Total liabilities	321,000	312,000
	Stockholders' equity
	Common stock	370,000	250,000
	Retained earnings	140,000	90,000
	Treasury stock	(50,000)	-
	Total Stockholders’ Equity	460,000	340,000
	Total Liabilities & Stockholders' Equity	$ 781,000	$ 652,000

Answer 1

		Statement of cashflows
	Cashflow from operating activities:
	Net income				62700
	Adjustments:
	Gain on disposal of plant assets				-12000
	Depreciation expense				25000
	Decrease in accounts receivable
	(113000-95000)				18000
	Increase in merchandise inventory
	(172000-165000)				-7000
	Decrease in accounts payable
	(175000-144000)				-31000
	Decrease in accrued liabilities
	(47000-17000)				-30000
	Cashflow from operating activities (A)				25700
	Cashflow from investing activities:
	Sale of plant assets		(75000-7500+12000)		79500
	Purchase of plant assets			(Note:1)	-278000
	Sale of investments				50000
	Cashflow from investing activities (B)				-148500
	Cashflow from financing activities:
	Issued notes payable (160000-90000)				70000
	Issue of common stock (370000-250000)				120000
	Purchase of treasury stock				-50000
	Dividend paid (Note:2)				-12700
	Cashflow from financing activities ©				127300
	Net increase in cash (A)+(B)+©				4500
	Add:Beginning balance of cash				62000
	Ending balance of cash				66500
	Note:1-Cost of palant purchased
	Analyze Property,Buildings and equipment
	Beginning balance				304000
	Less: Plant sold				75000
					229000
	Less:Ending balance				507000
	Asset purchased				278000
	Note:2-Dividend paid
	Analysis of retained earnings account
	Beginning balance				90000
	Add: Net income				62700
					152700
	Less:Ending balance				140000
	Dividend paid				12700