Question

Prepare a statement of cash flows using the indirect method. (please show all work/ calculations)

		2017	2016
Assets:
Cash		200,000	70,000
Accounts receivable, net		87,000	65,000
Inventory		55,000	60,000
Property, plant & equipment		700,000	600,000
Accumulated depreciation		(100,000)	(60,000)
Total Assets		942,000	735,000
Liabilities & Equity
Accounts payable		45,000	40,000
Accrued liabilities		46,000	40,000
Common stock		460,000	460,000
Retained earnings		391,000	195,000
		942,000	735,000
Sales		1,200,000
Cost of goods sold		650,000
Gross profit		550,000
Operating expenses		180,000
Pre-tax income		370,000
Income taxes		74,000
Net income		296,000

Answer 1

NASH CORPORATION
Statement of Cashflows
For the year Ended December 31, 2017
Cash flows from operating activities
Net Income		$   296,000
Adjustments to reconcile net income to :
Depreciation expense	$      40,000		100000-60000
Increase in accounts receivable	$   (22,000)		65000-87000
Decrease in inventory	$        5,000		60000-55000
Increase in accounts payable	$        5,000		45000-40000
Increase in accrued liabilities	$        6,000		46000-40000
		$      34,000
Net cash flow from operating activities		$   330,000
Cash flows from investing activities
Cash paid for Purchase of equipment	$ (100,000)		600000-700000
Net cash used for investing activities		$ (100,000)
Cash flows from financing activities
Cash paid for dividend	$ (100,000)		391000-195000-296000
Net cash flow used by financing activities		$ (100,000)
Net increase in cash and cash equivalents		$   130,000
Cash and cash equivalents at beginning of period		$      70,000
Cash and cash equivalents at end of period		$   200,000