Question

BG Wholesalers is developing its annual financial statements at December 31, 2016. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:

	2016				2015
Balance sheet at December 31
Cash	$	39,400			$	31,600
Accounts receivable		36,300				31,600
Merchandise inventory		45,000				40,500
Property and equipment		125,600				102,700
Less: Accumulated depreciation		(34,000)				(27,100)
	$	212,300			$	179,300
Accounts payable	$	40,300			$	31,600
Accrued wage expense		3,500				4,000
Note payable, long-term		47,500				52,900
Contributed capital		94,400				74,700
Retained earnings		26,600				16,100
	$	212,300			$	179,300
Income statement for 2016
Sales	$	137,000
Cost of goods sold		87,000
Other expenses		39,500
Net income	$	10,500

Additional Data:
a.	Bought equipment for cash, $22,900.
b.	Paid $5,400 on the long-term note payable.
c.	Issued new shares of stock for $19,700 cash.
d.	No dividends were declared or paid.
e.	Other expenses included depreciation, $6,900; wages, $20,500; taxes, $6,200; other, $7,200.
f.	Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.

Required:

1.

Prepare the statement of cash flows for the year ended December 31, 2016, using the indirect method. (List cash outflows as negative amounts.) BG WHOLESALERS Statement of Cash Flows For the Year Ended December 31, 2016 Cash flows from operating activities: Adjustments to reconcile net income to net cash provided by operating activities: 0 0 Cash flows from investing activities: 0 Cash flows from financing activities: 0 $0

Answer 1

Answer:-

BG Wholesalers
Statement of Cash Flow (Using Indirect Method)
For the year ended December 31, 2016
Particulars	Amount
	$
Cash flow from opreating activities
Net Income	10500
Adjustments to reconcile net income to net cash provided by opreating activities
Adjustment for non cash effects
Depreciation	6900
Change in opreating assets & liabilities
Increase in Accounts Receiviable	-4700
Increase in Merchandise inventory	-4500
Increase in Accounts payable	8700
Decrease in Accrued wages expense	-500
Net cash flow from opreating activities (a)	16400
Cash Flow from Financing activities
Long term note paid	-5400
Issued new share of stock	19700
Net cash Flow from Financing activities (b)	14300
Cash Flow from Investing activities
Purchase of Equipment	-22900
Net cash Flow from Investing activities (c)	-22900
Net Channge in cash c=a+b+c	7800
Beginning cash balance	31600
Closing cash balance	39400