Question

The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:

	Dec. 31, 20Y2			Dec. 31, 20Y1
Assets
Cash	$ 910,700			$ 978,540
Accounts receivable (net)	828,740			755,880
Inventories	1,256,770			1,156,590
Prepaid expenses	29,140			34,610
Land	313,280			473,560
Buildings	1,448,010			892,490
Accumulated depreciation-buildings	(409,820)			(382,490)
Equipment	509,990			450,800
Accumulated depreciation-equipment	(140,250)			(157,550)
Total assets	$4,746,560			$4,202,430
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$ 901,850			$ 951,680
Bonds payable	265,810			0
Common stock, $20 par	314,000			116,000
Paid-in capital: Excess of issue price over par-common stock	752,000			554,000
Retained earnings	2,512,900			2,580,750
Total liabilities and stockholders' equity	$4,746,560			$4,202,430

The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 20Y2 are as follows:

ACCOUNT Land				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance			473,560
Apr. 20	Realized $149,100 cash from sale		160,280	313,280

ACCOUNT Buildings				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance			892,490
Apr. 20	Acquired for cash	555,520		1,448,010

ACCOUNT Accumulated Depreciation-Buildings				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				382,490
Dec. 31	Depreciation for year		27,330		409,820

ACCOUNT Equipment				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance			450,800
Jan. 26	Discarded, no salvage		49,600	401,200
Aug. 11	Purchased for cash	108,790		509,990

ACCOUNT Accumulated Depreciation-Equipment				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				157,550
Jan. 26	Equipment discarded	49,600			107,950
Dec. 31	Depreciation for year		32,300		140,250

ACCOUNT Bonds Payable				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
May 1	Issued 10-year bonds		265,810		265,810

ACCOUNT Common Stock, $20 par				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				116,000
Dec. 7	Issued 9,900 shares of common stock for $40 per share		198,000		314,000

ACCOUNT Paid-in Capital in Excess of Par-Common Stock				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				554,000
Dec. 7	Issued 9,900 shares of common stock for $40 per share		198,000		752,000

ACCOUNT Retained Earnings				ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				2,580,750
Dec. 31	Net loss	32,670			2,548,080
Dec. 31	Cash dividends	35,180			2,512,900

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.

Whitman Co.
Statement of Cash Flows
For the Year Ended December 31, 20Y2
Cash flows from operating activities:
	$
Adjustments to reconcile net loss to net cashflow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow used for operating activities		$
Cash flows from investing activities:
	$
Net cash flow used for investing activities
Cash flows from financing activities:
	$
Net cash flow from financing activities
		$
Cash at the beginning of the year
Cash at the end of the year		$

Answer 1

Answer-

WHITEMAN CO.
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED 31 DECEMBER 20Y2
Particulars		Amount
		$
Cash flow from operating activities
Net Income		-32670
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation	($27330+$32300)	59630
Change in operating assets & liabilities
Increase in accounts receivable		-72860
Increase in inventory		-100180
Decrease in prepaid expenses		5470
Decrease in accounts payable		-49830
Net cash flow from operating activities (a)		-190440
Cash Flow from Investing activities
New equipment purchased		-108790
Building purchased		-555520
Land sold		160280
Net cash Flow from Investing activities (b)		-504030
Cash Flow from Financing activities
Cash dividends paid		-35180
Common stock issued		396000
Bonds issued		265810
Net cash Flow from Financing activities (c)		626630
Net Change in cash c=a+b+c		-67840
Beginning cash balance		978540
Closing cash balance		910700