Question

The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as follows:

		Dec. 31, 20Y3		Dec. 31, 20Y2
Assets
Cash		$306,450		$282,770
Accounts receivable (net)		111,020		101,560
Inventories		313,390		300,700
Investments		0		116,490
Land		160,740		0
Equipment		345,770		265,850
Accumulated depreciation—equipment		(80,950)		(71,690)
	Total assets	$1,156,420		$995,680
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)		$209,310		$196,150
Accrued expenses payable (operating expenses)		20,820		25,890
Dividends payable		11,560		8,960
Common stock, $10 par		62,450		48,790
Paid-in capital: Excess of issue price over par-common stock		234,750		135,410
Retained earnings		617,530		580,480
	Total liabilities and stockholders’ equity	$1,156,420		$995,680

Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:

The investments were sold for $136,290 cash.

Equipment and land were acquired for cash.

There were no disposals of equipment during the year.

The common stock was issued for cash.

There was a $83,850 credit to Retained Earnings for net income.

There was a $46,800 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Livers Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y3
Cash flows from operating activities:
Net income	$
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation
Gain on sale of investments
Changes in current operating assets and liabilities:
Increase in accounts receivable
Increase in inventories
Increase in accounts payable
Decrease in accrued expenses payable
Net cash flow from operating activities		$
Cash flows from investing activities:
Cash received from sale of investments	$
Cash paid for purchase of land
Cash paid for purchase of equipment
Net cash flow used for investing activities
Cash flows from financing activities:
Cash received from sale of common stock	$
Cash paid for dividends
Net cash flow from financing activities
Change in cash		$
Cash at the beginning of the year
Cash at the end of the year		$

Answer 1

Livers Inc
Statement of Cashflows
For the year Ended December 31, 20Y3
Cash flows from operating activities
Net Income		$      83,850
Adjustments to reconcile net income to :
Depreciation expense	$        9,260		80950-71690
Gain on sale of investment	$   (19,800)		116490-136290
Changes in current operating assets and liabiltiies
Increase in accounts receivable	$      (9,460)		101560-111020
Increase in inventory	$   (12,690)		300700-313390
Increase in accounts payable	$      13,160		209310-196150
Decrease in accrued expenses payable	$      (5,070)		20820-25890
		$   (24,600)
Net cash flow from operating activities		$      59,250
Cash flows from investing activities
Cash paid for Purchase of equipment	$   (79,920)		265850-345770
Cash paid for Purchase of land	$ (160,740)
Cash received from sale investment	$   136,290
Net cash used for investing activities		$ (104,370)
Cash flows from financing activities
Cash paid for dividend	$   (44,200)		11560-8960-46800
Cash proceeds from issue of common stock	$   113,000		62450-48790+234750-135410
Net cash flow from financing activities		$      68,800
Net increase in cash and cash equivalents		$      23,680
Cash and cash equivalents at beginning of period		$   282,770
Cash and cash equivalents at end of period		$   306,450