Labels Dec. 31, Dec. 31, December 31, 20Y3 20Y3 20Y2 For the Year Ended December 31, 20Y3 Amount Descriptions Assets $625,680.00 $586,230.00 228,100.00 3 Cash Cash received from sale of investments 208,850.00 4 Accounts receivable (net) Cash paid for purchase of land Cash paid for purchase of equipment Cash received from issuing common 5 Inventories 640,910.00 617,650.00 6 Investments 0.00 240,620.00 7 Land 328,090.00 0,00 stock 704,540.00 553,320.00 8 Equipment 9 Accumulated depreciation-equipment Cash dividends (166,310.00) (147840.00) Decrease in accounts payable Decreașe in accounts receivable Decrease in accrued expenses payable Decrease in inventories 10 Total assets $2,361,010.00 $2.058,830.00 Liabilitles and Stockholders' Equity 11 12 Accounts payable $425,280.00 $404,550.00 41,990.00 52.020,00 13 Accrued expenses payable Depreciation Gain on sale of investments Increase in accounts payable Increase in accounts receivable 24,190.00 20,170.00 14 Dividends payable 15 Common stock, $4 par 142,000.00 106,000.00 16 Excess of paid-in capital over par 416,700.00 279,900.00 17 Retained eamings 1,310,850.00 1,196,190.00 Increase in accrued expenses payable 18 Total llabilities and stockholders equity $2,361,01000 $2,058,830.00 Increase in inventories Loss on sale of investments Net increase in cash Net decrease in cash Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: Net cash flows from operating activities Net cash flows used for operating a. The investments were sold for $279,190 cash. b. Equipment and land were acquired for cash. C. There were no disposals of equipment during the year. activities Net cash flows from investing activities Net cash flows used for investing d. The common stock was issued for cash. e. There was a $211,240 credit to Retained Earnings for net income. f. There was a $96,580 debit to Retained Earnings for cash dividends declared. activities Required: Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Be sure to complete the heading of the statement. Net cash flows from financing activities Net cash flows used for financing activities Net income Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each soction, if required.
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.
The statement of cash flow is a part of the financial statement prepared on the reporting date to represent the total cash inflows and outflows during the reporting period under three activities.
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