Question

Problem 2-Statement of cash flows. The information shown below is taken from the accounts of Waverly Corporation for the year ended December 31, 2017 Net income Amortization of patent Proceeds from issuance of common stock Decrease in inventory Sale of building at a $15,000 gain Decrease in accounts payable Purchase of equipment Payment of cash dividends Depreciation expense Decrease in accounts receivable Payment of mortgage Increase in short-term notes payable Sale of land at a $5,000 loss Purchase of delivery van Cash at beginning of year $344,000 12,000 33,000 37,000 85,000 15,000 185,000 44,000 55,000 23,000 85,000 8,000 40,000 33,000 105,000 Instructions Prepare a statement of cash flows for Robinson Corporation for the year ended December 31, 2017

Answer 1

Question: Statement of cash flows for Robinson corporation for the Year Ended december 31, 2017 Solution: INDIRECT METHOD CASH FLOW STATEMENT Dec 2017 $ 344,000 Cash flows from operating activities Net Income Adjustments for: Amortization of patent Depreciation Expenses Operating Profit before working capital change 12,000 55,000 S 67,000 Decrease in Accounts Receivable Decrease in Inventories Proceeds from issuance of Common stock Decrease in Accounts payable Cash generated from operations 23,000 37,000 33,000 (15,000) S 78,000 Net Cash from Investing activities $ 489,000 Cash flows from Investing activities Sale of Building incl.gain $15,000) Purchase of Equipment Sale of Land(incl. Loss$5,000) Purchase of delivery VAN Net Cash from Investing activities $ $ $ $ 85,000 (185,000) 40,000 (33,000) $ (93,000) $ Cash flows from financing activities Payment of cash dividend Increase in short term note payable Payment of mortgage Net Cash used in financing activities (44,000) 8,000 (85,000) $ $ (121,000) Net Increase or (Decrease) in cash and cash equivalent $ 275,000 Cash and Cash Equivalents Beginning Cash and Cash Equivalents End $ 105,000 $ 380,000