bolance sheet of LBCCC Inc at December 31 2016 and 201s i as

bolance sheet of LBCCC, Inc. at December 31, 2016 and 201s, i as foliowes Sovanre Assets Cash Accounts recelvable (net) Merchandise Inventory Prepaid epenses Equipment Accumulated Dec. 31, 2016 Dec. 31, 2015 $51,130 $62460 84,200 112,230 10,35o 3,160 228,610 186,970 4,570 (59 440)(45.850 Total $415,660 $395,290 Liabilities and Stockholders\' Equity Accounts payable (merchandise ecreditors) Mortgage note payable Common stock, $1 par Pald-in capital: Excess of issue price over par-common stodk $82,620 0 118,590 $87,290 13,000 186,000 129,370 $415,660 8,000 111,000 75,080 $395,290 Total Additional data obtained from the Iincome statement and from an examination of the accounts in the ledger for 2016 are as folows: a. Net income, $138,980. b. Depredation reported on the income statement, $29,110. c. Equipment was purchased at a cost of $57,160, and fully depredated equlpment costing $15,520 was discerded, 1 with no salvage realzed d. The mortgage note peyable was not due until 2018, but the terms permitted earler payment wilthout penalty. e. 5,000 shares of common stock were issued at $16 for cash f. Cash dividends decared and paid, $84,690. Required: Prepare a statement of cash flows, using the indirect method

Solution

Solution:

Statement of Cash Flows - LBCCC For year ended December 31, 2016
Particulars	Details	Amount
Cash Flow from Operating Activities:
Net Income		$138,980.00
Adjustments to reconcile net income to cash flow from operating activities:
Depreciation	$29,110.00
Decrease in Accounts Receivables ($84200 - $78560)	$5,640.00
Increase in Inventory ($112,230 - $104,350)	-$7,880.00
Increase in prepaid expenses ($4,570 - $3,160)	-$1,410.00
Increase in Accounts payable ($87290 - $82620)	$4,670.00
Total Adjustments		$30,130.00
Net Cash Flow From Operating Activites (A)		$169,110.00
Cash Flow from Investing Activities:
Purchase of equipment	-$57,160.00
Net Cash Flow From Investing Activites (B)		-$57,160.00
Cash Flow from Financing Activities:
Dividend paid	-$84,690.00
Payment of mortgage note	-$118,590.00
Proceed from issue of common stock (5000*$16)	$80,000.00
Net Cash Flow From Financing Activites (C)		-$123,280.00
Total Cash flow from all activities (A+B+C)		-$11,330.00
Cash at the beginning of the year		$62,460.00
Cash at the end of year		$51,130.00