Question

Ch 16-3 Exercises and Problems Statement of Cash Flows-Indirect Method The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 2001, is as follows: Dec. 31, 20Y2 Dec. 31, 2011 Assets $32 Cash Accounts receivable (net) Inventories Land Equipment Accumulated depreciation-equipment Total Assets (12) $298 $212 $38 $32 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 189

Answer 1

Requirement a

Olson Jones Industries inc
Cash Flow Statement
For year ended 31st December 20Y2
A. Cash Flows from Operating Activity
Net Income	$             64.00
Adjustments to reconcile net income to
net cash flow from operating activities:
Depreciation expense	$                6.00
Gain on sale of Land	$           (15.00)
Changes in current operating assets and liabilities:
Increase in Accounts receivables	$           (15.00)
Increase in Inventory	$           (13.00)
Increase in accounts payables	$                6.00
Net cash flow from Operating activities		$              33.00
B. Cash flows from Investing Activities
Sale of Land	$             25.00
Purchase of Equipment	$             (9.00)
Net cash flow used for investing activities		$              16.00
C. Cash Flows from Financing activities
Issue of Common stock	$             30.00
Cash paid for dividends	$           (14.00)
Cash flows from Financing activities		$              16.00
Net Increase (Decrease) in Cash [A+B+C]		$              65.00
Cash at the beginning		$              32.00
Cash at the end		$              97.00

Requirement b

Answer----------Less

Working

Dividends paid in cash
Dividends declared	$           20.00
Less: Increase in dividends payable	$           (6.00)
Dividends paid in cash	$           14.00