eBook Exercise 19 Statement of Cash Flows rlington Service C

eBook Exercise 1-9 Statement of Cash Flows rlington Service Company began the year 2014 with cash of $55,900. In addition to earning a net income of $32,500 distributing a cash dividend of $19,500, Arlington Service borrowed 78,000 from the bank and purchased equipment with $117,000 of cash. Also, Accounts Receivable increased by $7,800, and Accounts Payable increased by $11,700

Solution

STATEMENT OF CASH FLOW Amount in $ Amount in $ Net income $             32,500 Cash flows from operating activities Adjustments for: Depreciation of the year $                       -   $                       -   Effects/ changes in Assets & Liabilities Account receivables increase $              -7,800 Account Payable increase $             11,700 $                3,900 Net cash from operating activities $             36,400 Cash flows from investing activities Purchase of Equipment $        -1,17,000 Net cash used in investing activities $        -1,17,000 Cash flows from Financing activities Borrowed from Bank $             78,000 Dividend Paid $            -19,500 Net cash used in financing activities $             58,500 Net increase in cash and cash equivalents $            -22,100 Add :Cash and cash equivalents at beginning of period $             55,900 Cash and cash equivalents at end of period $             33,800