Question

Hunter Company is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Current Year Prior Year Balance Sheet at December 31 Cash Accounts Receivable Inventory Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement (current year) Sales Revenue Cost of Goods Sold Other Expenses Net Income $ 44,440 23,400 26,400 106,600 (35,400) $165,440 $ 22,600 840 32,000 78,000 32,000 $ 165,440 $ 16,000 25,000 32,000 98,000 (28,000) $ 143,000 $ 20,000 1,000 44,000 56,000 22,000 $ 143,000 $ 114,000 68,000 32,600 $ 13,400 Additional Data: a. Bought equipment for cash, $8,600. b. Paid $12,000 on the long-term note payable. c. Issued new shares of stock for $22,000 cash. d. Declared and paid a $3,400 cash dividend. e. Other expenses included depreciation, $7,400; salaries and wages, $11,400; taxes, $4,400; utilities, $9,400. f. Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash. Required: 1. Prepare the statement of cash flows for the year ended December 31 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

HUNTER COMPANY Statement of cash flows the year Ended December 31 for 1340 7400 ! Bash Flows fomo pecating Actieties'- Net Income Adjustment to Reconcile Net Income to Net cash provided by operating Actis tiesi Depreciation Decorare in Accounts Recievable Decrease in Inventory Increase in Accounts Payable Decrease in salaries and wages joyable 1600 5600 12620 -100 17040 Net Cash Flows from operatehg Ach'w hi. 30,440 -8Gw - 8ra I cash flows from Inverting Activitis :- Purchase of equipment cash used in Investing Aetirties cash flows from Financing Actistis? Repayment of Note Payable Proceeds from finance of New stuk pluilend delared and paid in cash Net cash flows from financing Actiuas Nee Increase in cash cash balance at beginning cash balance at ending -120 1 22,00 1 - 3400 Gow 26५५० 16000 fuuuno