In: Accounting
Burns Corporation's net income last year was $94,600. Changes in the company's balance sheet accounts for the year appear below:
Increases (Decreases) |
|||
Asset and Contra-Asset Accounts: | |||
Cash and cash equivalents | $ | 17,000 | |
Accounts receivable | $ | 13,300 | |
Inventory | $ | (16,600 | ) |
Prepaid expenses | $ | 4,300 | |
Long-term investments | $ | 10,300 | |
Property, plant, and equipment | $ | 73,500 | |
Accumulated depreciation | $ | 31,600 | |
Liability and Equity Accounts: | |||
Accounts payable | $ | (18,400 | ) |
Accrued liabilities | $ | 17,100 | |
Income taxes payable | $ | 4,200 | |
Bonds payable | $ | (64,200 | ) |
Common stock | $ | 41,200 | |
Retained earnings | $ | 90,300 | |
The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $4,300.
Required:
a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.)
b. Prepare the investing activities section of the company's statement of cash flows for the year.
c. Prepare the financing activities section of the company's statement of cash flows for the year.
a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.)
Net income | 94600 |
Adjustment to reconcile net income | |
Depreciation expense | 31600 |
Increase account receivable | -13300 |
Decrease inventory | 16600 |
Increase prepaid expense | -4300 |
Decrease account payable | -18400 |
Increase accured liabilities | 17100 |
Increase income tax payable | 4200 |
Net cash flow from operating activities | 128100 |
b. Prepare the investing activities section of the company's statement of cash flows for the year.
Cash flow from investing activities | |
Purchase long term investment | -10300 |
Purchase property,plant and equipment | -73500 |
Net cash flow from investing activity | -83800 |
c. Prepare the financing activities section of the company's statement of cash flows for the year.
Cash flow from financing activities | |
Repaid bonds payable | -64200 |
Issue common stock | 41200 |
Dividend paid | -4300 |
Net cash flow from financing activities | -27300 |