Question

Burns Corporation's net income last year was $98,300. Changes in the company's balance sheet accounts for the year appear below:

	Increases (Decreases)
Asset and Contra-Asset Accounts:
Cash and cash equivalents	$	25,000
Accounts receivable	$	14,200
Inventory	$	(17,100	)
Prepaid expenses	$	4,100
Long-term investments	$	11,000
Property, plant, and equipment	$	72,100
Accumulated depreciation	$	33,800
Liability and Equity Accounts:
Accounts payable	$	(19,600	)
Accrued liabilities	$	17,300
Income taxes payable	$	4,200
Bonds payable	$	(62,400	)
Common stock	$	42,000
Retained earnings	$	94,000

The company did not dispose of any property, plant, and equipment, sell any long-term investments, issue any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $4,300.

Required:

a. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.)

Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.) (Amounts to be deducted and cash outflows should be indicated with a minus sign.)

	Operating activities: Adjustments:

b. Prepare the investing activities section of the company's statement of cash flows for the year.

Prepare the investing activities section of the company's statement of cash flows for the year. (Amounts to be deducted and cash outflows should be indicated with a minus sign.)

	Investing activities:

c. Prepare the financing activities section of the company's statement of cash flows for the year.

Prepare the financing activities section of the company's statement of cash flows for the year. (Amounts to be deducted and cash outflows should be indicated with a minus sign.)

	Financing activities:

Answer 1

a.	Operating Activities:
	Net Income		98,300
	Adjustment
	Depreciation charges	33,800
	Increase in accounts receivable	(14,200)
	Decrease in inventory	17,100
	Increase in prepaid expenses	(4,100)
	Decrease in accounts payable	(19,600)
	Increase in accrued liabilities	17,300
	Increase in taxes payable	4,200	34,500
	Net cash provided by operating activities		132,800
b.	Investing activities:
	Increase in long-term investments	(11,000)
	Increase in plant & equipment	(72,100)
	Net cash used for investing activities		(83,100)
c.	Financing activities:
	Decrease in bonds payable	(62,400)
	Increase in common stock	42,000
	Cash dividends	(4,300)
	Net cash used in financing activities		(24,700)