ill Sprint 534 PM Done 10 of 13 2400 2700 34800Cost of sale

.ill Sprint . 5:34 PM Done 10 of 13 2400 27,00 34,800Cost of sales recelvabl 42,0004,000 Salaries expense 60,000 308000 $2,000 92000) 84,000)0 (8.0 st espense 50,800 72.800 ( 32,400 42.400 (30,000) ncome tanes expense 14,000 17,600(3,600Net income Accounts payable 22,000 Los on sale of equipment Unearned revenue 5400 Accrued salaries Taxes payable 23,.200 6,000 7,200 term notes payable 74000 11a000 (3S000) Common stock 180,00056,000 124,000 Retained earnings 01,200 64,800 36,400 Required: Prepare a Cash Flow Statement using the indirect method for 2016.

Solution

Statement of Cash Flows (Indirect Method) For the Year ended Dec 31, 2016 Cash Flow from opearating activities: Net Income     443,000.00 Add/(Less) non cash effects on operating activities Depreciation expense - Equipment        36,000.00 Loss on Sale of Equipment          6,000.00 Increase in Accounts Receivables     (34,800.00) Increase in Inventory     (14,000.00) Decrease in Accounts Payables     (22,000.00) Decrease in Unearned Revenue     (10,000.00) Decrease in Accrued Liabilities        (3,600.00) Increase in Income Tax Payable          7,200.00     (35,200.00) Net Cash provided by operating activities     407,800.00 Cash flow from Investing Activities Purchase of Equipment (124,000.00) Sale of Equipment        38,000.00 Net Cash usedd by Investing activities     (86,000.00) Cash Flow from Financing Activities Payment of Long Term Notes Payable     (36,000.00) Issue of Common Stock     124,000.00 Cash dividend paid (406,600.00) Net Cash used by Financing activities (318,600.00) Net Increase / (Decrease) in Cash          3,200.00 Cash balance at the beginning - Dec 31, 2015        86,000.00 Cash balance at the end - Dec 31, 2016.        89,200.00 Equipment Account Particulars Amt Particulars Amt To Balance B/f    308,000.00 By Cash      38,000.00 By Depreciation      28,000.00 To Cash    124,000.00 Loss on sale of equip.        6,000.00 By Balance C/f    360,000.00    432,000.00    432,000.00 Accumulated Dep. Particulars Amt Particulars Amt To Plant & Equipment      28,000.00 By Balance b/f      84,000.00 To Balance C/f      92,000.00 By Dep. Exp. (Bal. Fig.)      36,000.00    120,000.00    120,000.00 Retained Earnings Particulars Amt Particulars Amt To Cash Dividend (Bal. Fig)    406,600.00 By Balance b/f      64,800.00 To Balance C/f    101,200.00 By Net Income    443,000.00    507,800.00    507,800.00