Question

Statement of Cash Flows (Indirect Method)
Use the following information regarding the Newcastle Corporation to prepare a statement of cash flows using the indirect method:

Accounts payable decrease	$7,500
Accounts receivable increase	10,500
Wages payable decrease	4,500
Amortization expense	24,000
Cash balance, January 1	45,000
Cash balance, December 31	10,500
Cash paid as dividends	9,000
Cash paid to purchase land	150,000
Cash paid to retire bonds payable at par	112,500
Cash received from issuance of common stock	67,500
Cash received from sale of equipment	18,000
Depreciation expense	58,500
Gain on sale of equipment	21,000
Inventory increase	19,500
Net income	144,000
Prepaid expenses increase	12,000

Remember to use negative signs with answers when appropriate.

NEWCASTLE CORPORATION Statement of Cash Flows For Year Ended December 31
Cash Flow from Operating Activities
Net Income	Answer
Add (deduct) items to convert net income to cash basis
Depreciation	Answer
Amortization	Answer
Gain on Sale of Equipment	Answer
Accounts Receivable Increase	Answer
Inventory Increase	Answer
Prepaid Expenses Increase	Answer
Accounts Payable Decrease	Answer
Wages Payable Decrease	Answer
Cash Flow Provided by Operating Activities	Answer
Cash Flow from Investing Activities
Sale of Equipment	Answer
Purchase of Land	Answer
Cash Used by Investing Activities	Answer
Cash Flow from Financing Activities
Issuance of Common Stock	Answer
Retirement of Bonds Payable	Answer
Payment of Dividends	Answer
Cash Used by Financing Activities	Answer
Net Decrease in Cash	Answer
Cash at Beginning of Year	Answer
Cash at End of Year	Answer

Answer 1