Question

P1-33A Preparing the statement of cash flows-indirect method Accountants for Smithson, Inc. have assembled the following data for the year ended December 31, 2016: 2016 2015 Current Assets: Cash $ 102,700 $ 20,000 Accounts Receivable 63,500 69,500 Merchandise Inventory 85,000 80,000 Current Liabilities: easedin Pecurnis Pungable Accounts Payable $ 57,900 $ 56,000 Income Tax Payable 14,400 17,000

Answer 1

Smithson Inc
Cash flow statement
Cash flows from operating activities:
Net income		69,500
Less gain on sale of building	-4000
Depreciation	25000
Decrease in accounts receivable	6000
Increase in inventory	-5,000
Increase in accounts paybale	1,900
Decrease in income tax payable	-2,600
		21300
Net cash provided by operating activities (a)		90,800
Cash flows from investing activities:
Sale of building	57000
Purchase of Equipment	-73000
		-16,000
Net cash provided by Investing activities (b)		-16,000
Cash flows from financing activities:
Issuance of common stock	42,000
Issuance of note payble for cash	60,000
payment of notes paybale	-42,100
Dividend paid	-52,000
		7,900
Net cash provided by financing activities (c)		7,900
Net cash provided by all activities(a+b+c)		82,700
Cash balance, Decmber 31, 2015		20,000
Cash balance, December 31, 2016		1,02,700
Non cash investing Activity
Land purchased by issuing long term notes payable		1,18,000