Question

On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method. Assume that equipment costing $25,000 was purchased for cash and no long-term assets were sold during the period.

Stock was issued for cash-3,200 shares at par.
Net income for the current year was $76,000.
Cash dividends declared and paid were $13,000.

	Current Year	Prior Year
Assets
Cash	$ 170,000	$74,000
Accounts Receivable (net)	78,000	85,000
Inventories	106,500	90,000
Equipment	395,000	370,000
Accumulated Depreciation	(195,000)	(158,000)
Total assets	$ 554,500	$461,000
Liabilities and stockholders' equity
Accounts Payable (merchandise creditors)	$51,000	$50,000
Taxes Payable	2,500	5,000
Common Stock, $10 par	262,000	230,000
Retained Earnings	239,000	176,000
Total Liabilities and Stockholders' Equity	$ 554,500	$461,000

Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Breach Co.
Statement of Cash Flows
For Year Ended December 31
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 provided by financing activities
		$
Cash at the beginning of the year
Cash at the end of the year		$

Answer 1

Answer:-

Breach co.
Statement of Cash Flow (Using Indirect Method)
For the year ended,31 DECEMBER
Particulars	Amount
	$
Cash flow from opreating activities
Net Income	76000
Adjustments to reconcile net income to net cash provided by opreating activities
Adjustment for non cash effects
Depreciation	37000
Change in opreating assets & liabilities
Decrease in accounts receivable	7000
Increase in inventory	-16500
Increase in accounts payable	1000
Decrease in taxes payable	-2500
Net cash flow from opreating activities (a)	102000
Cash Flow from Financing activities
Common stock issued	32000
Dividend paid	-13000
Net cash Flow from Financing activities (b)	19000
Cash Flow from Investing activities
Equipment purchased	-25000
Net cash Flow from Investing activities (c)	-25000
Net Channge in cash c=a+b+c	96000
Beginning cash balance	74000
Closing cash balance	170000