Question

Prepare a Statement of Cash Flow for the year ending 2019 from the following information.

					2018	2019
Cash					85,000	27,000
Accounts Receivable					95,000	80,000
inventory					130,000	134,000
prepaid expenses					9,500	9,000
land					89,700	130,000
PP&E					295,500	256,700
accumulated depr					-30,000	-13,000
total assets					674,700	623,700
accounts payable					98,000	77,000
accrued liabilities					54,000	70,000
bonds payable					110,000	60,000
common stock					100,000	101,000
retained earnings					312,700	315,700
					674,700	623,700
	PP&E with a historical cost of $50,000 and a net book value of $28,000 was sold for $22,500
	$32,000 of dividends were declared and paid during the year.
	Land with a historical cost of $25,000 was sold for $35,000

Answer 1

Answer-

STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED 2019
Particulars		Amount
		$
Cash flow from operating activities
Net Income	($315700+$32000-$312700)	35000
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation expenses		5000
Loss on sale of equipment	($28000-$22500)	5500
Gain on sale of land	($35000-$25000)	-10000
Change in operating assets & liabilities
Decrease in accounts receivable		15000
Increase in inventory		-4000
Decrease in accounts payable		-21000
Increase in accrued liabilities		16000
Decrease in prepaid expenses		500
Net cash flow from operating activities (a)		42000
Cash Flow from Investing activities
New equipment purchased		-11200
Old equipment sold		22500
Land purchased		-65300
Land sold		35000
Net cash Flow from Investing activities (b)		-19000
Cash Flow from Financing activities
Common stock issued		1000
Bonds paid		-50000
Cash dividends paid		-32000
Net cash Flow from Financing activities (c)		-81000
Net Change in cash c=a+b+c		-58000
Beginning cash balance		85000
Closing cash balance		27000