Question

Mogale Travel Services, Inc. Comparative Balance Bhosle December 31, 2014 and 2013 Assets 2014 2013 Current asseta: Cash Accounts receivable Inventory Prepaid insurance 11.000 $ 18.000 78,000 79,000 58,000 18,000 9,000 12,000 $ 156,000 $ 127,000 Total current assets Land Equipment Less: Accumulated depreciation $ 105,000 $ 114,000 83.000 57.000 (15,000) (8.000) $ 329,000 $ 290,000 Total assets Llabilities $ Current liabilities: Accounts payable Wages payable Interest payable 28.000 $ 37.000 26,000 24.000 12.000 7 000 11000 4.000 Income taxes payable Total current liabilities $ 73.000 $ 16.000 Notes payable long term 96000 871000 Total liabilities $ 169.0001S 163 000 Stockholders' equity Common stock 129,000000 B1000 8000 Retained earning Total stockholders ISO900 Jotales and equity 20:00

please enlarge the pictures to view

Answer 1

Mosaic Travel Services Inc.

Statement of Cashflow Operating Activities Section using Indirect Method

For the Year Ended December 31,2014

Particulars	Amount	Amount
Operating Activities
Net Income		33,000
Adjustments to reconcile Net Income to Cash Basis
Add: Depreciation Expense	7,000
Add : Loss on Sale of Land	3,400
Add: Decrease in Accounts Receivables	1,000
Less: Increase in Inventory	40,000
Add : Decrease in Prepaid Insurance	3,000
Less : Decrease in Accounts Payables	9,000
Add : Increase in Wages Payables	2,000
Add : Increase in Income Taxes Payable	3,000
Add : Increase in Interest payable	1,000
Total Of Adjustments		-28,600
Net Cash provided by Operating Activities		4,400

Supporting Work

Loss on Sale of Land = Value of Land Sold - Sale Price of Land Sold

Loss on Sale of Land = 9,000 - 5,600 = $ 3,400

Depreciation for Year = Accumulated Depreciation 2014 - Accumulated Depreciation 2013

Depreciation for the Year = 15,000 - 8,000 = $ 7,000

Decrease in Accounts Receivables = 79,000 - 78,000 = $ 1,000

Increase in Inventory = 58,000 - 18,000 = $ 40,000

Decrease in Prepaid Insurance = 12,000 - 9,000 = $ 3,000

Decrease in Accounts Payables = 37,000 - 28,000 = $ 29,000

Increase in Wages Payables = 26,000 - 24,000 = $ 2,000

Increase in Income Taxes Payable = 7,000 - 4,000 = $ 3,000

Increase in Interest payable = 12,000 - 11,000 = $ 1,000

Rule for Changes in Current Assets and Liabilities for Cashflow Statement

Increase in Current Assets = Less

Decrease in Current Assets = Add

Increase in Current Assets = Add

Decrease in Current Liabilities = Less

Total Adjustments = Figures obtained from Addition and Subtraction of various Adjustments

Net cashflow provided by Operating Activities = Net Income + Total Adjustments