Question

Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in preparing the statement of cash flows (indirect method) for ATM Software Developers. All amounts are in thousands (000s). ATM SOFTWARE DEVELOPERS Statement of Cash Flows For the year ended December 31, 2021 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities Cash Flows from Investing Activities Net cash flows from investing activities Cash Flows from Financing Activities Net cash flows from financing activities Net increase (decrease) in cash Cash at the beginning of the period Cash at the end of the period $ 3,765 6,260 $10,025 Listed below in random order are line items to be included in the statement of cash flows. $8,650 13,075 5,465 Cash received from the sale of land Issuance of common stock Depreciation expense Increase in accounts receivable Decrease in accounts payable Issuance of long-term notes payable Purchase of equipment Decrease in inventory Decrease in prepaid rent Payment of dividends 4.090 1.760 16,495 39,865 1,475 905 6,370

Answer 1

Ans.	ATM   SOLFTWARE   DEVELOPERS
	Statement of Cash Flows
	For the Year Ended December 31, 2021
	Particulars	Amount	Amount
	Cash flow from operating activities:
	Net income		$12,400
	Adjustments to reconcile Net income to Net cash
	provided by (used for) Operating Activities:
	Depreciation expense	$5,465
	Add: Decrease in prepaid rent	$905
	Add: Decrease in inventory	$1,475
	Less: Increase in accounts receivables	-$4,090
	Less: Decrease in accounts payable	-$1,760	$1,995
	Net cash from operating activities		$14,395
	Cash flow from Investing activities:
	Cash received from sale of land	$8,650
	Purchase of equipment	-$39,865
	Net cash used by investing activities (B)		-$31,215
	Cash flow from Financing activities:
	Issuance of common stock	$13,075
	Issuance of long term notes payable	$16,495
	Payment of dividends	-$6,370
	Purchase of treasury stock	-$2,615
	Net cash from financing activities ©		$20,585
	Net increase in Cash (A + B + C)		$3,765
	Add: Cash at beginning of period		$6,260
	Cash at ending of period		$10,025
	*Decrease in current liabilities and Increase in current assets other than cash is deducted from Net Income.
	*Increase in current liabilities and Decrease in current assets other than cash is added to Net Income.
	*Non cash & Non operating expenses are added to Net income.
	*Non cash & Non operating income are deducted from Net income.
	*Sale or purchase transaction of property, plant and equipment are listed in the Investing activities section
	of cash flow statement.
	*Issue and redemption of shares and debentures and dividends paid are the financing activities.