Question

Assignment - 2 STATEMENT OF CASH FLOWS INDIRECT METHOD relay Tile company reported net income of 56.160 for 2018 but has been showing an overdraft in its bank account in recent monthThe name has contacted you as the auditor for an explanation. The comparative balance shoot was even to you for examination, along with the Following formation 52.500, and its book value was $500 Equipment was sold for $1.500 lts.com The was reported as Other Revenue Cash dividends of $4,500 were paid 31-Dec-18 31-Dec-17 Cash and cash equivalents Accounts receivable Inventory Prepaid Land Building Less: Accum Deprec- Building Equipment Less: Accum Deprec Equipment (960) 4,000 2,350 70 12,500 4,780 1.000 750 195 12,500 10,000 11,000 25,000 (15,000) 37.250 122,500) 25.000 114,000) 30,850 (18,400) 14,750 12,450 Total $ 42,710 $ 42,675 $ Accounts payable Taxes payable Wages payable Notes payable - current portion Notes payable long term Capital stock Retained Earnings 4,250 1,400 750 1,500 10,500 17,500 6,810 3,500 2,350 1,675 3,500 11,500 15,000 5,150 42,710 $ 42,675 Instructions Prepare a statement of cash flows for the year ended December 31, 2018 in the indirect method

Answer 1

Answer-

STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED DECEMBER 31, 2018
Particulars		Amount
		$
Cash flow from operating activities
Net Income		6160
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation expense		7100
Gain on sale of equipment		-1000
Change in operating assets & liabilities
Increase in Accounts receivable		-3000
Decrease in inventory		-1600
Decrease in prepaid		125
Decresae in taxes payable		-950
Decrease in wages payable		-925
Decrease in notes payable (current oprtion)		-2000
Increase in accounts payable		750
Net cash flow from operating activities (a)		4660
Cash Flow from Investing activities
Old Equipment sold		1500
New equipment purchased		-8900
Net cash Flow from Investing activities (b)		-7400
Cash Flow from Financing activities
Cash dividends paid		-4500
Common stock issued		2500
Notes payable paid		-1000
Net cash Flow from Financing activities (c)		-3000
Net Change in cash c=a+b+c		-5740
Beginning cash balance		4780
Closing cash balance		-960