Current Year Prior Year $ 65,000 78,000 106,500 Cash $ 54,000 Accounts Receivable (net) 85,000 Inventories 90,000 20,000 Land Equipment Accumulated Depreciation 495,000 -215,000 $529,500 370,000 -158,000 $461,000 Accounts Payable (merchandise creditors) Common Stock, $10 par Paid-In Capital in Excess of $ 53,500 $ 55,000 200,000 170,000 62,000 60,000 Par-Common Stock Retained Earnings 214,000 $529,500 176,000 $461,000
The following data pertains to the Milk Company for the fiscal years ended December 31 of the current and previous years. Assume $125,000 in cash was spent on equipment, and $15,000 was spent on land. The stock was sold for cash, and the
Required:
Prepare a statement of
Cash flows from operating Activities
| Particular | Amount |
| Net Income | $56,000 |
| Add(subtract) items which affect net income and cash flow differently: | |
| Depreciation | $57,000 |
| Decrease in Accounts receivable | $7,000 |
| Increase in inventory | ($16,500) |
| Decrease in Accounts Payable | ($1,500) |
| Net cash flow from operating Activities | $102,000 |
Cash flows from investing Activities :
equipment = ($125,000)
Land = ($15,000)
Sale of land = $35,000
Net cash flow from investing Activities = ($105,000)
Cash flows from financing Activities :
Dividend paid = ($18,000)
Issuance of paid in capital =$2,000
Issuance of common stock = $30,000
Net Cash flows from financing Activities =$14,000
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