Question

Statement of Cash Flows-Indirect Method The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 2041, is as follows: Dec. 31, Dec. 31, 2012 2011 Assets $155 Cash Accounts receivable (net) Inventories U Land Equipment Accumulated depreciation equipment (19) (10) Total Assets $476 $343 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) Dividends payable Common stock, $1 par Paid-in capital: Excess of issue price over par- common stock Retained earnings 236 307 $476 Total liabilities and stockholders' equity $343 The following additional information is taken from the records: 1. Land was sold for $53. 2. Equipment was acquired for cash. 3. There were no disposals of equipment during the year. 4. The common stock was issued for cash. 5. There was a $102 credit to Retained Earnings for net income. 6. There was a $31 debit to Retained Earnings for cash dividends declared.

Answer 1

Solution

Olson Jones Industries inc
Cash Flow Statement
For year ended 31st December 20Y2
A. Cash Flows from Operating Activity
Net Income		$         102.00
Adjustments to reconcile net income to
net cash flow from operating activities:
Depreciation expense	$             9.00
Gain on sale of Land	$         (32.00)
Changes in current operating assets and liabilities:
Increase in Accounts receivables	$         (24.00)
Increase in Inventory	$         (20.00)
Increase in accounts payable	$             9.00
		$         (58.00)
Net cash flow from Operating activities		$           44.00
B. Cash flows from Investing Activities
Sale of Land	$           53.00
Purchase of Equipment	$         (15.00)
Net cash flow used for investing activities		$           38.00
C. Cash Flows from Financing activities
Issue of Common stock	$           43.00
Cash paid for dividends	$         (21.00)
Cash flows from Financing activities		$           22.00
Net Increase (Decrease) in Cash [A+B+C]		$         104.00
Cash at the beginning		$           51.00
Cash at the end		$         155.00

Dividend paid in cash = Dividend declared - Increase in dividend payable