Otten Corporation Balance Sheet December 31 2014 and 2013 As

Otten Corporation Balance Sheet December 31, 2014 and 2013 Assets $13,000 14,000 15,000 9,000 51,000 58,000 (24,000) $85.000 Cas.. $38,000 ..18,000 .25,000 7,000 88,000 ....60,000 (18,000) $130.000 Inventory Prepaid insurance Current Asset... Equipmen. Accumulated depreciation-equipment.. $ 25,000 25,000 .37,000 7,000 7,000 45,000 23,000 Accounts payable.... Current Liabilities Bonds payable. Common stock... Retained earnings.. 30.000 $85,000 Additional information for the year ending 12/31/14 (including income statement information): 1. Net income was $30,000. stock was issued for $17,000. 3. Cash dividends of $12,000 were declared and paid during the year 4. Equipment was sold for $13,000, resulting in a $5,000 gain. 5. Equipment was purchased for $20,000. 6. Depreciation expense was $4,000. 7. Bonds of $8,000 were repaid during the year. Instructions Prepare a Statement of Cash Flows for the year ended 2014 using the indirect method. Path: p

Solution

Statement of cash flow :

Cash flow from operating activities
Net income	30000
Adjustment to reconcile net income
Depreciation exp	4000
Gain on sale of equipment	(5000)
Increase account receivable	(4000)
Increase inventory	(10000)
Decrease prepaid insurance	2000
Increase account payable	18000
Net cash flow from operating activities		35000
Cash flow from investing activities
equipment sold	13000
Equipment purchased	(20000)
Net cash flow from investing activities		(7000)
Cash flow from financing activities
Bonds repaid	(8000)
Dividend paid	(12000)
Issue common stock	17000
Net cash flow from financing activities		(3000)
Net cash flow		25000
Beginning cash		13000
Ending cash		38000