Unit 6 Assignment 4 – Cash Flow Indirect

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AC216Unit6Assignment4-CashFlowIndirect.xlsx

Problem 3

Cash Flow - Indirect Method
Complete the following Spreadsheet for the preparation of statement of cash flows under the indirect method. (The statement of cash flows is not required.) (Enter all amounts as positive values.)
Additional Information
a. Net income for the year was $117,000. 117,000
b. Dividends of $114,000 cash were declared and paid. 114,000
c. The only noncash expense was $87,000 of depreciation. 87,000
d. Purchased plant assets for $87,000 cash. 87,000
e. Notes payable of $37,000 were issued for $37,000 cash. 37,000
f. $87,000 increase in accounts receivable. 87,000
g. $37,000 decrease in inventory. 37,000
h. $27,000 decrease in accounts payable. 27,000
BLUE RIDGE CORPORATION
Spreadsheet for Statement of Cash Flows—Indirect Method
For Year Ended December 31
1-Jan Analysis of Changes 3-Dec
Debit Credit
Balance Sheet—Debit Bal. Accounts
Cash $131,000 $94,000
Accounts receivable 137,000
Inventory 284,000
Plant assets 617,000
Totals $1,169,000
Balance Sheet—Credit Bal. Accounts
Accumulated depreciation $117,000
Accounts payable 184,000
Notes payable 387,000
Common stock 217,000
Retained earnings 264,000
Totals $1,169,000
Statement of Cash Flows
Operating activities
Net income 117,000
Increase in accounts receivable 0
Decrease in inventory 0
Decrease in accounts payable 0
Depreciation expense 0
Investing activities
Cash paid to purchase plant assets 87,000
Financing activities
Cash paid for dividends 0
Cash from issuance of notes payable 37,000
154,000 87,000