Question

Pumbu VILICA U WC LLC LO 2,3 P11-59A. (Learning Objectives 2.3: Prepare the statement of cash flows Smither Software Corp. has assembled the following data for the years en 2018 and 2017 are the statement of cash flows-indirect method) owing data for the years ending December 31, A1 e December 31, 2018 2017 3 4 5 $ $ Current Accounts: Current assets: Cash and cash equivalents Accounts receivable Inventories Prepaid expenses Current liabilities: Accounts payable Income tax payable Accrued liabilities 66,500 21,000 89,500 3,600 26,000 64,300 79,000 2,300 8 9 10 $ $ 11 58,100 18,500 15.100 55,300 16,200 17,200 13 $204,000 31,400 11,000 21,000 $14,500 4,000 19,000 Transaction Data for 2018: Acquisition of land by issuing long-term note payable ..... Stock dividends ..................... Collection of loan................. Depreciation expense .......... Purchase of building with cash. Retirement of bonds payable by issuing common stock... Purchase of long-term investment with cash....... Purchase of treasury stock..... Loss on sale of equipment..... Payment of cash dividends .... Issuance of long-term note payable to borrow cash..... Net income.................... Issuance of common stock for cash... Proceeds from sale of equipment ....... Amortization expense.......... 24,400 66,000 97,000 37,000 60,000 44700 12,700 5,100 Requirement 1. Prepare Smither's statement of cash flows using t Smither's statement of cash flows using the indirect method to report operating activities. Include a schedule of noncash investing and financing activities

Answer 1

Answer-

SMITHER SOFTWARE CORP.
STATEMENT OF CASH FLOWS (USING INDIRECT METHOD)
FOR THE YEAR ENDED DECEMBER 31,2018
Particulars		Amount
		$
Cash flow from operating activities
Net Income		66000
Adjustments to reconcile net income to net cash provided by operating activities
Adjustment for non cash effects
Depreciation		21000
Loss on sale of equipment		4000
Amortization expense		5100
Change in operating assets & liabilities
Decrease in accounts receivable		43300
Increase in inventory		-10500
Increase in prepaid expenses		-1300
Increase in accounts payable		2800
Increase in income taxes payable		2300
Decrease in accrued liabilities		-2100
Net cash flow from operating activities (a)		130600
Cash Flow from Investing activities
Sale of equipment		12700
Building purchased		-97000
Long term investments purchased		-44700
Net cash Flow from Investing activities (b)		-129000
Cash Flow from Financing activities
Cash dividends paid		-19000
Long term notes issued		24400
Treasury stock purchased		-14500
Collection of loan		11000
Common stock issued		37000
Net cash Flow from Financing activities (c)		38900
Net Change in cash c=a+b+c		40500
Beginning cash balance		26000
Closing cash balance		66500
Schedule of non cash investing & financing activities
Issuance of long term note for new land		204000
Issuance of common stock for retirement of bonds		60000