Homework SourseExercise 125 The following information is available for Boni
Exercise 12-5
The following information is available for Bonita Industries for the year ended December 31, 2017.
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Adjustments to reconcile net income to
| Beginning cash balance | $ 45,855 | |
| Accounts payable decrease | 3,770 | |
| Depreciation expense | 165,078 | |
| Accounts receivable increase | 8,356 | |
| Inventory increase | 11,209 | |
| Net income | 289,498 | |
| Cash received for sale of land at book value | 35,665 | |
| Cash dividends paid | 12,228 | |
| Income taxes payable increase | 4,789 | |
| Cash used to purchase building | 294,491 | |
| Cash used to purchase treasury stock | 26,494 | |
| Cash received from issuing bonds | 203,800 |
Solution
Solution - Statement of cash flows (Indirect Method)
Bonita Industries
Statement of Cash Flows
For the Year Ended December 2017
Net Increase in Cash
(A + B + C)
Cash at end of period
($45855 + 45855)
| Particulars | Amount | |
| Cash Flow From Operating Activities | ||
| Net Income | $289498 | |
| Adjustment to reconcile the net income to net cash provided by operating activities | ||
| Add : Depreciation expenses | $165078 | |
| Add : Increase in income tax payable | $4789 | |
| Less : Accounts Payable Decrease (Cash Outflow) | ($3770) | |
| Less : Accounts Receivable Increase (Outflow) | ($8356) | |
| Less : Inventory Increase (Cash Outflow) | ($11209) | $146532 |
| Net Cash Provided by Operating Activities (A) | $436030 | |
| Cash Flow from Investing Activities | ||
| Cash received from sale of land at book value | $35665 | |
| Cash used to purchase Building | ($294491) | |
| Net Cash Used by Investing activities (B) | ($258826) | |
| Cash flow from Financing Activities | ||
| Cash received from issuing bonds | $203800 | |
| Cash Dividend Paid | ($12228) | |
| Cash used to purchase treasury stock | ($26494) | |
| Net Cash provided by financing activities (C) | $165078 | |
| Net Increase in Cash (A + B + C) | $342282 | |
| Cash at the Beginning of Period | $45855 | |
| Cash at end of period ($45855 + 45855) | $388137 | |
