Statement of Cash Flows—Indirect Method The comparative balance sheet of Livers Inc. for December 31, 20Y3...

Statement of Cash Flows—Indirect Method

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		$292,970	$275,040
Accounts receivable (net)		106,130	98,780
Inventories		299,610	292,480
Investments		0	113,310
Land		153,670	0
Equipment		330,560	258,580
Accumulated depreciation—equipment		(77,390)	(69,730)
	Total assets	$1,105,550	$968,460

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)		$200,100	$190,790
Accrued expenses payable (operating expenses)		19,900	25,180
Dividends payable		11,060	8,720
Common stock, $10 par		59,700	47,450
Paid-in capital: Excess of issue price over par-common stock		224,430	131,710
Retained earnings		590,360	564,610
	Total liabilities and stockholders’ equity	$1,105,550	$968,460

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

The investments were sold for $132,570 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 $71,270 credit to Retained Earnings for net income.

There was a $45,520 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:
Net income	$
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		$

Solutions

Expert Solution

Cash flow Statemeent:
Cash flows from Operating activities:
Net income for the year	71270
Adjustsment to reconcile
Depreciation	7660
Gain on sale of investment	-19260

Change in current operating assets and liabilities
Increase in Accounts receivable	-7350
Increase in Inventory	-7130
Increase in Accounts payable	9310
Decrease in Accrued expense liability	-5280
Net cash providedfrom operating activities		49220

Cash flows from Investing activities
Sale of Investment	132570
Purchase of Equipment	-71980
Ppurchase of land	-153670
Net cash used in Investing activities		-93080

Cash flows from Financing activities
Dividend paid (45520+8720-11060)	-43180
Common Stock issued (284130-179160)	104970
Net cash provided from Financing activities		61790
Nnet Increase in cash		17930
Beginning Balance of cash		275040
Ending balance of cash		292970

ekkarill92 answered 1 year ago

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