Question

FUN Clipboard PRODUCT NOTICE Most of the features of Excel have been disabled because it hasn't been activated. Activate 554 1 The Statement of Cash Flows 2 Using Excel to prepare the statement of cash flows, indirect method 4 The James Island Clothing Company began operations on July 1, 2018 5 The adjusted trial balance as of December 31, 2018, appears below, along with transaction data for 2018. JAMES ISLAND CLOTHING COMPANY Adjusted Trial Balance 12/31/18 Account Title Cash Accounts Receivable Inventory Office Equipment Truck Accumulated Depreciation--Plant Assets Accounts Payable Note Payable--Short Term Note Payable--Long Term Common Stock Retained Earnings Dividends Sales Revenue Cost of Goods Sold Rent Expense Advertising Expense Depreciation Expense Balance Debit Credit 95,700 12,000 4,400 26,000 18,000 6,000 5,500 10,000 33,000 100,000 1,000 15,000 3,600 2.000 800 6,000 169,500 $ $ 169,500 Transaction data for 2018 Cash paid for purchase of office equipment Cash paid for purchase of truck Acquisition of plant assets with a long-term notes payable Cash payment of dividends Cash receipt from issuance of common stock 6,000 5.000 33,000 1,000 100,000

Answer 1

JAMES ISLAND CLOTHING COMPANY Cash Flow Statement for the Year Ending 31st December,2018 Indirect Method 5 Particulars 6 Cash Flow From Operating Activities 7 Net Income (Working Note 1) Amount ($) 2,600 6,000 8,600 9 Adjustments - 10 Add :Depreciation Expense 11 Operating Profit before working capital changes 12 Changes in Working Capital: 13 Increase in Inventory 14 Increase in Account Receivable 15 Increase in Note Payable - Short Term 16 Increase in Account Payable 17 Total (4,400) (12,000) 10,000 5,500 7,700 19 Net Cash Flow From Operating Activities (A) 7,700

5 Cash Flow From Investing Activities -6 Purchase of Office Equipment -7 Purchase of Truck 8 Net Cash Flow From Investing Activities (B) (26,000) (18,000) (44,000) o Cash Flow From Financing Activities 1 Cash Received from Issue of Common Stock 2 Dividend Paid 3 Cash Received from note payable -Long Term 4 Net Cash Flow From Financing Activities (C) 100,000 (1,000) 33,000 132,000 95,700 6 Net Cash Flows from All Activities (A+B+C) 7 Cash Balance At July 1, 2018 8 Cash Balance at December 31, 2018 95,700

15,000 50 51 Working Note 1 52 Calculation of Net Income 53 54 Sales Revenue 55 Less : 56 Cost of Goods Sold 57 Rent Expense 58 Advertisement Expense 59 Depreciation Expense 60 Net Income (3,600) (2,000) (800) (6,000) 2,600 62 63 64