Dec. 31, 20Y2Dec. 31, 20Y1Assets Cash$155 $51 Accounts receivable (net)89 64 Inventories56 35 Land127 145 Equipment72 56 Accumulated depreciation-equipment(19) (10) Total Assets$480 $341 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors)$60 $51 Dividends payable10 - Common stock, $1 par32 16 Paid-in capital: Excess of issue price over par—common stock73 40 Retained earnings305 234 Total liabilities and stockholders' equity$480 $341 The following additional information is taken from the records:Land was sold for $45.Equipment was acquired for cash.There were no disposals of equipment during the year.The common stock was issued for cash.There was a $103 credit to Retained Earnings for net income.There was a $32 debit to Retained Earnings for cash dividends declared.a. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Solution a: Statement of cash flow using indirect method are as under:

Answered: Dec. 31, 20Y2 Dec. 31, 20Y1 Assets…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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	Dec. 31, 20Y2	Dec. 31, 20Y1
Assets
Cash	$155		$51
Accounts receivable (net)	89		64
Inventories	56		35
Land	127		145
Equipment	72		56
Accumulated depreciation-equipment	(19)		(10)
	Total Assets	$480		$341
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$60		$51
Dividends payable	10		-
Common stock, $1 par	32		16
Paid-in capital: Excess of issue price over par—common stock	73		40
Retained earnings	305		234
	Total liabilities and stockholders' equity	$480		$341

The following additional information is taken from the records:

Land was sold for $45.
Equipment was acquired for cash.
There were no disposals of equipment during the year.
The common stock was issued for cash.
There was a $103 credit to Retained Earnings for net income.
There was a $32 debit to Retained Earnings for cash dividends declared.

a. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

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