Question

3. Below is financial information extracted from financial statements for KHLED Inc. for 2016.

items	Amounts in thousands of Saudi Riyal
Net in come	200
Depreciation expense	15
Increase in accounts receivable	35
Decrease in inventory	30
Increase in accounts payable	20
Proceeds from sale of land	50
Purchases of equipment	20
Proceeds from issuance of common stock	40
Cash dividends	5
Cash, January 1, 2016	100

Required: Prepare cash flow statement for KHALED Inc. for 2016 using the indirect method.

The answer should not be photo or handwriting.

Answer 1

KHLED Inc.

Statement of Cash Flows For 2016

(Indirect Method)

Cash Flows from Operating Activities

Net Income $200

Adjustments to reconcile net income to

Net Cash Provided by Operating Activities

Depreciation Expense                                          $15

Decrease in Inventory                                          $30

Increase in Accounts Payable $20

Increase in Accounts Receivables ($35)

Net Cash Provided by Operating Activities $30

Cash Flows from Investing Activities

Proceeds from sale of land $50

Purchases of equipment ($20)

Net Cash Provided by Investing Activities $30

Cash Flows from Financing Activities

Proceeds from issuance of common stock $40

Payment of Cash Dividends- ($5)

Net Cash from Financing Activities- $35

Net Increase in Cash $295

Cash at Beginning of Period $100

Cash at End of Period $395