Question

1. (Appendix 21.1) Comprehensive

   The following are Adair Company's December 31, 2018, post-closing trial balance and the December 31, 2019, adjusted trial balance:

   		12/31/18 Post-Closing Trial Balance				12/31/19 Adjusted Trial Balance
   Accounts		Debit		Credit		Debit		Credit
   Cash		2,700				3,300
   Accounts Receivable		7,300				6,200
   Inventory		8,100				9,900
   Investments in Bonds		10,000				18,600
   Property and Equipment		105,300				133,300
   Accumulated Depreciation				42,400				49,200
   Accounts Payable				8,100				8,500
   Salaries Payable				1,300				700
   Interest Payable				0				300
   Notes Payable				0				9,000
   Common Stock, no par				43,600				58,100
   Retained Earnings				38,000				31,500
   Sales								89,000
   Cost of Goods Sold						48,800
   Depreciation Expense						6,800
   Salaries Expense						12,000
   Other Operating Expenses						1,700
   Interest Revenue								1,200
   Interest Expense						900
   Income Tax Expense						6,000
   Totals		133,400		133,400		247,500		247,500

   A review of the accounting records reveals the following additional information for 2019:

   • Investments in bonds to be held to maturity were purchased at year-end for $8,600.
   • A building was purchased for $28,000.
   • A note payable was issued for $9,000.
   • Common stock was issued for $14,500.
   • Dividends of $6,500 were declared and paid.

   Required:

   1. Using the direct method for operating cash flows, prepare a spreadsheet to support the 2019 statement of cash flows for Adair. If an amount box does not require an entry, enter "0".
      

      ADAIR COMPANY Cash Flows Worksheet For the Year Ended December 31, 2019
      	12/31/18 Post-Closing Trial Balance		12/31/19 Adjusted Trial Balance		Change		Worksheet Entries
      Account Titles	Debit	Credit	Debit	Credit	Debit	Credit	Debit	Credit
      Cash
      Accounts Receivable
      Inventory
      Investment in Bonds
      Property and Equipment
      Accumulated Depreciation
      Accounts Payable
      Salaries Payable
      Interest Payable
      Notes Payable
      Common Stock, no par
      Retained Earnings
      Sales
      Cost of Goods Sold
      Depreciation Expense
      Salaries Expensee
      Other Operating Expenses
      Interest Revenue
      Interest Expense
      Income Tax Expense
      Totals

      	Worksheet Entries
      	Debit	Credit
      Cash Flows from Operating Activities:
      Cash Flows from Investing Activities:
      Cash Flows from Financing Activities:
      Totals

   2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.) Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.
      

      ADAIR COMPANY Statement of Cash Flows For Year Ended December 31, 2019
      Operating Activities:
      Cash Inflows:
      	$
      Cash inflows from operating activities		$
      Cash Outflows:
      	$
      Cash outflows from operating activities
      Net cash provided by operating activities		$
      Investing Activities:
      	$
      Net cash used for investing activities
      Financing Activities:
      	$
      Net cash provided by financing activities
      		$
      		$

Answer 1