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Statement of Cash Flows—Indirect Method The comparative balance sheet of Olson-Jones Industries Inc. for December 31,...

Statement of Cash Flows—Indirect Method

The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:

Dec. 31, 20Y2 Dec. 31, 20Y1
Assets
Cash $209 $67
Accounts receivable (net) 119 84
Inventories 74 46
Land 170 191
Equipment 96 74
Accumulated depreciation-equipment (26) (13)
Total Assets $642 $449
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors) $81 $67
Dividends payable 13 -
Common stock, $1 par 42 21
Paid-in capital: Excess of issue price over par—common stock 102 53
Retained earnings 404 308
Total liabilities and stockholders' equity $642 $449

The following additional information is taken from the records:

  1. Land was sold for $53.
  2. Equipment was acquired for cash.
  3. There were no disposals of equipment during the year.
  4. The common stock was issued for cash.
  5. There was a $138 credit to Retained Earnings for net income.
  6. There was a $42 debit to Retained Earnings for cash dividends declared.

a. 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.

Olson-Jones Industries Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y2
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation
Gain on sale of land
Changes in current operating assets and liabilities:
Decrease in accounts receivable
Increase in inventories
Increase in accounts payable
Net cash flow from operating activities
Cash flows from (used for) investing activities:
Cash from sale of land
Cash used for purchase of equipment
Net cash flow from investing activities
Cash flows from (used for) financing activities:
Cash from sale of common stock
Cash used for dividends
Net cash flow from financing activities
Increase in cash
Cash at the beginning of the year
Cash at the end of the year

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Expert Solution

ekkarill92 answered 1 year ago
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