Question

Statement of Cash Flows (Indirect Method)
The Huber Company's income statement and comparative balance sheets as of December 31 of 2013 and 2012 follow:

HUBER COMPANY Income Statement For the Year Ended December 31, 2013
Sales Revenue		$1,040,000
Cost of Goods Sold	$689,000
Wages and Other Operating Expenses	223,600
Depreciation Expense	35,100
Patent Amortization Expense	7,800
Interest Expense	23,400
Income Tax Expense	32,500
Gain on exchange of land for patent	(46,800)	964,600
Net Income		$75,400

HUBER COMPANY Balance Sheets
	Dec. 31, 2013	Dec. 31, 2012
Assets
Cash	$44,200	$20,800
Accounts Receivable	83,200	63,700
Inventory	110,500	83,200
Land	152,100	208,000
Building and Equipment	573,300	469,300
Accumulated Depreciation	(156,000)	(130,000)
Patent	94,900	-
Total Assets	$694,000	$550,000
Liabilities and Stockholders' Equity
Accounts Payable	$46,800	$33,800
Interest Payable	16,900	6,500
Income Tax Payable	9,100	15,600
Bonds Payable	227,500	97,500
Common Stock	455,000	455,000
Retained Earnings	146,900	106,600
Total Liabilities and Stockholders' Equity	$694,000	$550,000

During 2013, $35,100 of cash dividends were declared and paid. A patent valued at $102,700 was obtained in exchange for land. Equipment that originally cost $26,000 and had $9,100 accumulated depreciation was sold for $16,900 cash. Bonds payable were sold for cash and cash was used to pay for structural improvements to the building.

Required
a. Compute the change in cash that occurred during 2013.
b. Prepare a statement of cash flows using the indirect method.

a. Change in Cash during 2013 $Answer AnswerIncreaseDecrease

b. Use a negative sign with cash outflow answers.

HUBER COMPANY Statement of Cash Flows For Year Ended December 31, 2013
Cash Flow from Operating Activities
Net Income		$Answer
Add (deduct) items to convert net income to cash basis
Depreciation		Answer
Patent Amortization		Answer
Gain on Exchange of Land for Patent Retirement		Answer
Accounts Receivable	AnswerIncreaseDecrease	Answer
Inventory	AnswerIncreaseDecrease	Answer
Accounts Payable	AnswerIncreaseDecrease	Answer
Interest Payable	AnswerIncreaseDecrease	Answer
Income Tax Payble	AnswerIncreaseDecrease	Answer
Cash Flow Provided by Operating Activities		Answer
Cash Flow from Investing Activities
Sale of Equipment		Answer
Improvements to Building		Answer
Cash Used by Investing Activities		Answer
Cash Flow from Financing Activities
Issuance of Bonds Payable		Answer
Payment of Dividends		Answer
Cash Provided by Financing Activities		Answer
Net AnswerIncreaseDecrease in Cash		Answer
Cash at Beginning of Year		Answer
Cash at End of Year		$Answer

Answer 1

HUBER COMPANY
Statement of Cash Flows
For Year Ended December 31, 2013
Cash Flow from Operating Activities
Net Income		75,400
Add (deduct) items to convert net income to cash basis
Depreciation		35,100
Patent Amortization		7,800
Gain on Exchange of Land for Patent Retirement		-46,800
Accounts Receivable	Increase	-19,500
Inventory	Increase	-27,300
Accounts Payable	Increase	13,000
Interest Payable	Increase	10,400
Income Tax Payble	Decrease	-6,500
Cash Flow Provided by Operating Activities		41,600
Cash Flow from Investing Activities
Sale of Equipment		16,900
Improvements to Building *		-1,30,000
Cash Used by Investing Activities		-1,13,100
Cash Flow from Financing Activities
Issuance of Bonds Payable		1,30,000
Payment of Dividends		-35,100
Cash Provided by Financing Activities		94,900
Net Decrease in Cash		23,400
Cash at Beginning of Year		20,800
Cash at End of Year		44,200
*
Opening Book value of Building & Equipment		4,69,300
Less: Cost of Equipment sold		26,000
		4,43,300
Ending Book value of Building & Equipment		5,73,300
Improvement to Building		1,30,000