Question

REQUIREMENT-1:

CF from operating activities - indirect method

REQUIREMENT-2:

CF from Investing Activities - indirect method

CF from Financing Activities - indirect method

	12/31/2020	12/31/2019
Cash	$30,000	$80,000
Accounts Receivable, net	160,000	100,000
Inventory	100,000	70,000
Prepaid Rent	20,000	10,000
Total Current Assets	$310,000	$260,000
Equipment	$400,000	$200,000
Accumulated Depreciation	-60,000	-50,000
Total Assets	$650,000	$410,000
Accounts Payable	$50,000	$40,000
Salaries Payable	40,000	40,000
Bonds Payable	0	50,000
Common Stock, $10 par	350,000	100,000
Retained Earnings	210,000	180,000
Total Liabilities & Stockholders' Equity	$650,000	$410,000
Additional information:
1. The company reports net income of $100,000 and depreciation expense of $20,000 for the year ending December 31, 2020.
2. Dividends declared and paid in 2020, $70,000.
3. Equipment with a cost of $20,000 and accumulated depreciation of $10,000 was sold for $3,000.
4. New equipment was purchased for cash.
5. No common stock was retired during 2020.

Answer 1

cash flow statement
cash flow from operating activities
net income		100000
depreciation		20000
loss on sale of equipment		7000
changes in working capital
increase in accounts receivables		-60000
Increase in inventory		-30000
increase in prepaid rent		-10000
Increase in accounts payable		10000
cash flow from operating activities			37000
cash flow from investing activities
cash proceeds from sale of equipment		3000
purchase of equipment during the year		-220000
cash flow from investing activities			-217000
cash flow from financing activities			130000
payment of bonds		-50000
payment of dividend		-70000
proceeds from sale of common stock		250000
net cash flow from operations			-50000
beginning cash balance			80000
Year end cash balance			30000
Year end balance in equipment account		400000
value of equipment after sale of equipment of 20000	(200000-20000)	180000
purchase of new equipment		220000