Cash Flow Assignment Instuctions Complete the statement of c

Cash Flow Assignment Instuctions: Complete the statement of cash fiows for 2017 using the indirect method Here is a comparative balance sheet for Joe Compan JOE COMPANY Comparative Balance Sheet 31-Dec Assets Cash Accounts receivable 2017 2016 68,000.00 22,000.00 189,000.00 100,000.00 200,000.00 32,000.00 260,000.00 66,000.00 597,000.00 Equipment Accumulated De ciation Liabilities and Stockholders\' equit Accounts pavable Bonds payable Common stock (S1 par Retained earnings Total 47,000.00 192,000.00 597.000.00 174,000.00 134,000.00 $555,000.00 Additional information: 1 Net income for 2017 was $93,000 2. Cash dividends of 35,000 were declared and paid 3. Bonds payable amounting to $50,000 were redeemed for cash $50,000. 4. Common stock was issued for $42,000 cash 5. No equipment was sold dur 2017

Solution

Statement of cash flow Indirect method of accounting Net cash flow from operating activities Net income for the year 93,000 Adjustments to reconcile net income Depreciation expense 34000 increase in accounts receivable -9000 Decrease in inventory 19000 Decrease in accounts payable -8000 Net cash inflow from operating activities 129,000 Net cash flow from investing activities purchase of Equipment -60,000 Cash from sale of land 20,000 Net cash outflow from investing activities -40,000 Net cash flow from financing activities cash dividend -35000 Redemption of bonds -50,000 cash from stock issue 42,000 Net cash outflow from financing activities -43,000 Net increase in cash 46,000 cash at beginning of the year 22,000 Cash at year end 68,000