Statement of Cash Flows Indirect Methed Arctic Companys inco

Statement of Cash Flows (Indirect Methed) Arctic Company\'s income statement and comparative balance sheets as of December 31 of 2013 and 2012 follow ARCTIC COMPANY For the Year Ended ales Revene Cost off Goods Sold $640 800 Wages Expense Advertising Experse 37,200 Depredason Experse 26,400 31, 2013 228,000 21,600 Gain on Sale of Land 0.000)924 000 50,400 Net Loss ARCTIC COMPANY Dec. 31, 2013 Dec. 31,2012 604306 Prepaid Adsg 32.000640 360067.0 Equity 5 6 7 8

Solution

Solution a:

Change in cash during 2013 = Ending Cash balance - Beginning cash Balance = $48720 - $33600 =$15,120

Solution b:

ARCTIC Company
Statement of Cash Flows
For the Year ending December 31, 2013 (Indirect method)
Particulars	Amount
Cash Flow from Operating Activities:
Net loss	-$50,400.00
Add (deduct) items to convert net income to cash basis
Depreciation	$26,400.00
Gain on sale of Land	-$30,000.00
Increase in Accounts Receivables ($60480 - $60000)	-$480.00
Decrease in Inventory ($135600 - $128400)	$7,200.00
Decrease in Prepaid Advertising ($15600-12000)	$3,600.00
Decrease in Accounts payable ($37200-$20400)	-$16,800.00
Increase in Interest Payabe	$7,200.00
Cash Flow used by Operating Activites (A)	-$53,280.00
Cash Flow from Investing Activities:
Sale of Land	$84,000.00
Purchase of Plant Assets [$432000 - ($266400-54000)]	-$219,600.00
Cash used by Investing Activites (B)	-$135,600.00
Cash Flow from Financing Activities:
Issuance of bonds payable	$240,000.00
Purchase of Treasury Stock	-$36,000.00
Cash provided by Financing Activites (C)	$204,000.00
Net Increase in Cash (A+B+C)	$15,120.00
Cash at the beginning of the year	$33,600.00
Cash at the end of year	$48,720.00