Question

Prepare the financing section of the statement of cash flows for the year ended December 31, 2018.

13) Dakota Telescopes Company uses the indirect method to prepare the statement of cash flows. Refer to the following income statement:

                                   Dakota Telescopes Company

                                             Income Statement

                                 Year Ended December 31, 2019

Sales Revenue                                                   $275,000

Interest Revenue                                                     2,600

Total Revenues                                                                                   $277,600

Cost of Goods Sold                                             135,000

Salary Expense                                                      66,500

Depreciation Expense                                          32,000

Other Operating Expenses                                 35,900

Interest Expense                                                      2,400

Income Tax Expense                                              6,500

Loss on Sale of Plant Assets                                 2,000

Total Expenses and Losses                                                                280,300

Net Loss                                                                                                ($2,700)

Additional information provided by the company includes the following:

Current assets other than cash decreased by $25,000.

Current liabilities increased by $3,000.

Prepare the operating activities section of the statement of cash flows.

Answer 1

Statement of cash flows (PARTIAL)

Particulars	$	$
Cash flow from Operating Activities
Net loss	- 2,700
Add: Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense	32,000
Loss on sale of plant assets	2,000
Changes in current operating assets and liabilities:
Decrease in current assets	25,000
Increase in current liabilities	3,000
Net cash provided by Operating Activities		$59,300