Hunter Company is developing its annual financial statements

Hunter Company is developing its annual financial statements at December 31, 2015. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized 2015 2014 Balance Sheet at December 31 44,440 16,000 25,000 Accounts Receivable Inventory Equipment 23,400 26,400 106,600 32,000 Accumulated Depreciation-Equipment (35,400 (28,000) $165,440 $143,000 Accounts Payable Salaries and Wages Payable Note Payable (long-tem) Common Stock Retained Earnings S 22,600 20,000 1,000 32,000 56,000 840 44,000 32,000 22,000 $165,440 $143,000 78,000 ncome Statement for 2015 Sales Revenue Cost of Goods Sold Other Expenses $114,000 68,000 32,600 Net Income $ 13,400 Additional Data a Bought equipment for cash, $8,600. b. Paid $12,000 on the long-term note payable c Issued new shares of stock for $22,000 cash d. Declared and paid a $3,400 cash dividend e. Other expenses included depreciation, $7,400, salaries and wages, $11,400; taxes, $4,400, utlities, $9,400 f Accounts Payable includes only inventory purchases made on credit. Because there are no liability aocounts relating to taxes or other expensos, assume that these expenses were fully paid in cash

Solution

Cash Flow Statement Cash flow from Operating Activities Net Income 13400 Adjustments to reconcile Net Income to Net cash Provided by Operating Activities Depreciation 7400 Decrease in accounts receivable 1600 Decrease in inventory 5600 Increase in accounts payable 2600 Decreased in Wages payable (160) Net cash flow from operating activities 30440 Cash flow from investing activities Equipment purchased (8600) Net cash used in investing activites (8600) Cash flow from financing activities Paid for long term notes (12000) Issue of stock 22000 Dividend paid (3400) Net cash flow from fianncing activities 6600 Net increase in cash 28440 Add- Opening cash balalnce 16000 Closing cash balance 44440