2Preparation of statement of cash flows format provided 15 p

2Preparation of statement of cash flows (format provided)- 15 poi The balance sheets for Hatner Company showed the following information. Additional ation conceming transactions and events during 2008 are presented below Hafner Company Balance Sheet Cash Inventory Long-term investments Property, plant & equipment Accumulated depreciation s 30,900 43,300 35,000 0. 236,500 S 10,200 20,300 42,000 15,000 150,000 (37.700) 25.000) 308.000 $212,500 $ 17,00026,500 Accounts payable Accrued liabilities Long-term notes payable Common stock Retained earnings 21,000 70,000 130,000 17,000 50,000 90,000 308.000 $212.500 Additional transaction data: 1. Net income for year 2008, $76,000. 2. Depreciation on plant assets for the year, $12,700. 3. Sold the long-term investments for $28,000 (assume gain or loss is ordin 4, Purchased machinery costing $26,500, paid cash. 5. Purchased machinery by issuing a $60,000 long-term note payable. 8 Paid a $40,000 long-term note payable by issuing common stock. ary). Instructions Using the format provided on the next page, prepare a statement of cash flows using indirect method for 2008. Do.- AC_ wl ch2 i@ Inte ?0. ?\" CH2.. I, cn2. X, cha

Solution

Hafner Company Statement of Cash Flow For the year ended December 31,2008 Cash flows from operating activities Net income $                    76,000.00 Adjustments to net income     Depreciation $                12,700.00 Gain on sale of Investment $              (13,000.00) Increase in Accounts Receivable($43300-$20300) $              (23,000.00) Decrease in Inventory($35000-$42000) $                   7,000.00 Decrease in Accounts Payable($17000-$26500) $                (9,500.00) Increase in Accrued Liabilities($21000-$17000) $                   4,000.00 $                  (21,800.00)       Net cash provided by operating activities=(A) $                    54,200.00 Cash flows from investing activities Sale of Long Term Investment $                28,000.00 Purchae of Equipment $              (26,500.00)       Net cash provided by investing activities =(B) $                      1,500.00 Cash flows from financing activities Dividend Paid $              (35,000.00)       Net cash provided by financing activities=(C ) $                  (35,000.00) Change in cash=(A)+(B)+(C ) $                    20,700.00 Cash, beginning balance $                    10,200.00 Cash, ending balance $                    30,900.00 Working Machinery Particular Amount Particular Amount To Bal b/d $             1,50,000.00 To Bank $                26,500.00 To Long Term Note Payable $                60,000.00 By Bal C/d $      2,36,500.00 $             2,36,500.00 $      2,36,500.00 Accumulated Depreciation Particular Amount Particular Amount By Bal b/d $         25,000.00 By Depreciation $         12,700.00 By Bal C/d $                37,700.00 $                37,700.00 $         37,700.00 Investment A/C Particular Amount Particular Amount To Bal b/d $                15,000.00 By Bank $         28,000.00 To Gain on Sale of Investments $                13,000.00 $                28,000.00 $         28,000.00 Dividend Paid Beginning Retained Earnings $                29,000.00 Add: Net Income $                76,000.00 Total $             1,05,000.00 Less: Ending Retained Earnings $                70,000.00 Dividend Paid $                35,000.00