Bramble Corporation has contracted with you to prepare a statement of cash flows. The controller has provided the following information. Cash Accounts receivable Inventory Equity investments Buildings Equipment Copyrights Totals Allowance for doubtful accounts Accumulated depreciation-equipment Accumulated depreciation-buildings Accounts payable Dividends payable Notes payable, short-term (nontrade) Long-term notes payable Common stock Retained earnings 1. 2. 3. Additional data related to 2025 are as follows. 4. 5. 6. 7. December 31 2025 $38,800 12,200 11,900 -0- -0- 39,900 5,000 $107,800 $3,000 1,900 -0- 5,000 -0- 2,900 36,000 38,000 21,000 $107,800 2024 $12,800 9,900 10,000 3,000 30,000 19,900 5,300 $90,900 $4,400 4,500 5,900 3,900 5,000 4,100 25,000 33,000 5,100 $90,900 Equipment that had cost $11,100 and was 30% depreciated at time of disposal was sold for $2,500. $5,000 of the long-term note payable was paid by issuing common stock. Cash dividends paid were $5,000. On January 1, 2025, the building was completely destroyed by a flood. Insurance proceeds on the building were $32,700 (net of $4,000 taxes). Equity investments (ownership is less than 20% of total shares) were sold at $1,400 above their cost. No unrealized gains or losses were recorded in 2025. Cash of $15,100 and a long-term note for $16,000 were given for the acquisition of equipment. Interest of $2,000 and income taxes of $5,000 were paid in cash. (a) Use the indirect method to analyze the above information and prepare a statement of cash flows for Bramble. (Show amounts tha decrease cash flow with either a-sian e a -15.000. or in parenthesis eg (15.0001
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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