The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows: 1 Dec. 31, 20Y2Dec. 31, 20Y12Assets 3Cash$183.00$14.004Accounts receivable (net)55.0049.005Inventories117.0099.006Land250.00330.007Equipment205.00175.008Accumulated depreciation-equipment(68.00)(42.00)9Total assets$742.00$625.0010Liabilities and Stockholders’ Equity 11Accounts payable (merchandise creditors)$51.00$37.0012Dividends payable5.00 13Common stock, $1 par125.0080.0014Paid-in capital: Excess of issue price over par—common stock85.0070.0015Retained earnings476.00438.0016Total liabilities and stockholders’ equity$742.00$625.00 The following additional information is taken from the records:1.Land was sold for $120.2.Equipment was acquired for cash.3.There were no disposals of equipment during the year.4.The common stock was issued for cash.5.There was a $62 credit to Retained Earnings for net income.6.There was an $24 debit to Retained Earnings for cash dividends declared. Required:A.Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required.B.Was the net cash flow from operations for Olson-Jones Industries Inc. more or less than net income? What is the source of this difference?

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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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The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:

1		Dec. 31, 20Y2	Dec. 31, 20Y1
2	Assets
3	Cash	$183.00	$14.00
4	Accounts receivable (net)	55.00	49.00
5	Inventories	117.00	99.00
6	Land	250.00	330.00
7	Equipment	205.00	175.00
8	Accumulated depreciation-equipment	(68.00)	(42.00)
9	Total assets	$742.00	$625.00
10	Liabilities and Stockholders’ Equity
11	Accounts payable (merchandise creditors)	$51.00	$37.00
12	Dividends payable	5.00
13	Common stock, $1 par	125.00	80.00
14	Paid-in capital: Excess of issue price over par—common stock	85.00	70.00
15	Retained earnings	476.00	438.00
16	Total liabilities and stockholders’ equity	$742.00	$625.00

The following additional information is taken from the records:

1.	Land was sold for $120.
2.	Equipment was acquired for cash.
3.	There were no disposals of equipment during the year.
4.	The common stock was issued for cash.
5.	There was a $62 credit to Retained Earnings for net income.
6.	There was an $24 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required.

Was the net cash flow from operations for Olson-Jones Industries Inc. more or less than net income? What is the source of this difference?

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