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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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