Question

Selected financial statement information and additional data for Stanislaus Co. is presented below. Prepare a statement of cash flows for the year ending December 31, 2020.

 

 Additional data for 2020:

 1. Net income was $210,200.

 2. Land was sold at a loss of $10,000. No land was bought during the year.

 3. No equipment was sold during the year. All equipment purchases were paid for in cash.

 4. Interest payments amounted to $10,000 and Tax payments amounted to $15,000

Answer 1

Solution

Statement of Cash Flows
For the Year Ended December 31, 2020
Cash flows from operating activities:
Net income		$       210,200
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on sale of land	$              10,000
Depreciation expense	$          26,600
Increase in accounts receivables	$         (60,200)
Increase in inventory	$         (38,600)
Increase in accounts payable	$          40,600
		$        (21,600)
Net cash from Operating Activities		$       188,600
Cash flows from investing activities:
Cash received from sale of land	$              22,800
Purchase of Equipment	$       (285,600)
Net cash from Investing Activities		$      (262,800)
Cash flows from financing activities:
Repayment of Short term notes payable	$         (37,800)
Cash received from issue of long term notes	$        134,400
Issue of Common stock	$          67,200
Dividends paid	$         (71,600)
Net cash from Financing Activities		$         92,200
Net change in cash during the year		$         18,000
Add: Beginning cash balance		$         42,000
Ending cash balance		$         60,000