Question

Selected financial information for the Adelphi Company for the fiscal years ended December 31, 2018 and 2017 follows. Prepare a cash flow statement using the indirect method. Properly title the statement.

	2018	2017
Cash balance	$113,500	$37,500
Net income	142,500	162,000
Depreciation Expense	42,000	35,000
Purchase of Plant Assets	135,000	125,000
Disposal of Plant Assets	40,000	50,000
Gain (Loss) on Disposal of Plant Assets	(10,000)	5,000
Accounts Receivable Balance	64,500	58,000
Accounts Payable Balance	42,000	39,000
Interest Expense	8,000	6,000
Income Taxes Paid	35,000	28,000
Dividends Paid	30,000	25,000
Common Stock Issued for Cash	20,000	0

Answer 1

Adelphi company
Statement of Cash flows
Year Ended December 31, 2018
Cash flows from Operating activities:
Net income		1,42,500
Adjustments to reconcile net income to net cash provided by operating activities :
Depreciation	42,000
Loss on Disposal of plant Assets	10,000
Increase in Accounts Receivable	-6,500
Decrease in Inventory
Increase in Accounts Payable	3,000
Decrease in Notes payable
		48,500
Net cash provided by operating activities		1,91,000
Cash flow form Investing activities
Purchase of Plant assets	-1,35,000
Disposal of Plant Assets	30,000
Net cash used for investing activities		-1,05,000
Cash flow from Financing Activities
Common stock issued for cash	20,000
Dividends paid	-30,000
Net cash provided by financing activities		-10,000
Net cash generated during the year		76,000
Cash at the beginning of the year		37,500
Cash at the end of the year		1,13,500