Statement of cash flows (indirect method) Cash flows from operating activities Net income 72,600 …

Statement of cash flows (indirect method)

Cash flows from operating activities

Net income
72,600

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adjustments to net income

depreciation
4,000

Gan on sale of investments
-7,000

Increase in AR
-36,000

Decrease in inventory
40,000

Increased in Accounts payable
13,000

Decrease in Accrued liabilities
-3,100

net cash provided by operating activities
83,500

Cash flows from investing activities

Purchase of Plant assets
-16,000

Sale of long-term investments
20,000

net cash provided by investing activities
4,000

Cash flows from financing activities

retiement of bonds
-31,000

payment of dividend
-32,500

sale of common stock
6,000

net cash provided by financing activities
-57,500

net increase in cash
30,000

Cash balance, beginning
230,000

cash balance, ending
260,000

Statement of Cash flows (direct method)

Cash flows from operating activities

cash received from customers
714,000
(sales – increase in AR)

cash paid for merchandise
477,000
(cogs – decrease in invnetory – increase in AP)

cash paid for other operating expenes
105,100
(selling & admin exp + decrease in accrued liab – depreciation)

cash paid for income taxes
48,400

net cash provided b oeprating activities
83,500

Cash flows from investing activities

Purchase of Plant assets
-16,000

Sale of long-term investments
20,000

net cash provided by investing activities
4,000

Cash flows from financing activities

retiement of bonds
-31,000

payment of dividend
-32,500

sale of common stock
6,000

net cash provided by financing activities
-57,500

net increase in cash
30,000

Cash balance, beginning
230,000

cash balance, ending
260,000

 

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