Statement of Cash Flows—Indirect Method The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $183 $14 Accounts receivable (net) 55 49 Inventories 117 99 Land 250 330 Equipment 205 175 Accumulated depreciation—equipment (68) (42) Total assets $742 $625 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $51 $37 Dividends payable 5 - Common stock, $1 par 125 80 Paid-in capital: Excess of issue price over par—common stock 85 70 Retained earnings 476 438 Total liabilities and stockholders' equity $742 $625 The following additional information is taken from the records: Land was sold for $120. Equipment was acquired for cash. There were no disposals of equipment during the year. The common stock was issued for cash. There was a $62 credit to Retained Earnings for net income. There was a $24 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.

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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Statement of Cash Flows—Indirect Method

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

	Dec. 31, 20Y2	Dec. 31, 20Y1
Assets
Cash	$183		$14
Accounts receivable (net)	55		49
Inventories	117		99
Land	250		330
Equipment	205		175
Accumulated depreciation—equipment	(68)		(42)
	Total assets	$742		$625
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$51		$37
Dividends payable	5		-
Common stock, $1 par	125		80
Paid-in capital: Excess of issue price over par—common stock	85		70
Retained earnings	476		438
	Total liabilities and stockholders' equity	$742		$625

The following additional information is taken from the records:

Land was sold for $120.
Equipment was acquired for cash.
There were no disposals of equipment during the year.
The common stock was issued for cash.
There was a $62 credit to Retained Earnings for net income.
There was a $24 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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