Question

The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below.

GREAT ADVENTURES, INC.
Income Statement
For the year ended December 31, 2022
Net revenues:				$	172,710
Expenses:
Cost of goods sold	$	38,900
Operating expenses		56,280
Depreciation expense		17,850
Interest expense		7,782
Income tax expense		14,900
Total expenses					135,712
Net income				$	36,998

GREAT ADVENTURES, INC.
Balance Sheets
December 31, 2022 and 2021
									Increase (I) or
	2022				2021				Decrease (D)
Assets
Current assets:
Cash	$	211,112			$	61,860			$	149,252		(I)
Accounts receivable		48,320				0				48,320		(I)
Inventory		7,800				0				7,800		(I)
Other current assets		980				4,820				3,840		(D)
Long-term assets:
Land		580,000				0				580,000		(I)
Buildings		824,000				0				824,000		(I)
Equipment		70,240				44,000				26,240		(I)
Accumulated depreciation		(26,050	)			(8,200	)			17,850		(I)
Total assets	$	1,716,402			$	105,200
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	24,320			$	2,960			$	21,360		(I)
Interest payable		790				790
Income tax payable		14,900				14,080				820		(I)
Other current liabilities		23,400				0				23,400		(I)
Notes payable (current and long-term)		603,704				30,800				572,904		(I)
Stockholders’ equity:
Common stock		128,000				20,000				108,000		(I)
Paid-in capital		976,800				0				976,800		(I)
Retained earnings		58,488				33,850				24,638		(I)
Treasury stock		(114,000	)			0				(114,000	)	(I)
Total liabilities and stockholders’ equity	$	1,716,402			$	105,200

Additional Information for 2022:

1. Land of $580,000 was obtained by issuing a note payable to the seller.
2. Buildings of $824,000 and equipment of $26,240 were purchased using cash.
3. Monthly payments during the year reduced notes payable by $7,096.
4. Issued common stock for $1,080,000.
5. Purchased 10,800 shares of treasury stock for $19 per share.
6. Sold 4,800 shares of treasury stock at $20 per share.
7. Declared and paid a cash dividend of $12,360

Required:

Prepare the statement of cash flows for the year ended December 31, 2022, using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)

GREAT ADVENTURES, INC. Statement of Cash Flows For the Year Ended December 31, 2022 Cash Flows from Operating Activities Adjustments to reconcile net income to net cash flows from operating activities: Net cash flow from operating activities $0 Cash Flows from Investing Activities Net cash flow from investing activities 0 Cash Flows from Financing Activities Net cash flows from financing activities 0 0 Cash at the beginning of the period Cash at the end of the period $0 Note: Noncash Activities

Answer 1

Answer-

GREAT ADVENTURES INC.
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED 31 DECEMBER,YEAR 2022
Particulars		Amount
		$
Cash flow from operating activities
Net Income		36998
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation expense		17850
Change in operating assets & liabilities
Increase in accounts receivable		-48320
Increase in inventories		-7800
Decrease in other current assets		3840
Increase in accounts payable		21360
Increase in income taxes payable		820
Increase in other current liabilities		23400
Net cash flow from operating activities (a)		48148
Cash Flow from Investing activities
Equipment purchased		-26240
Building purchased		-824000
Net cash Flow from Investing activities (b)		-850240
Cash Flow from Financing activities
Notes payable paid		-7096
Cash dividends paid		-12360
Common stock issued		1084800
Treasury stock purchased		-114000
Net cash Flow from Financing activities (c)		951344
Net Change in cash c=a+b+c		149252
Beginning cash balance		61860
Closing cash balance		211112
Schedule of non cash investing & financing activities
Issuance of notes for purchase of land		$580000