Statement of Cash Flows—Indirect Method The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $ 858,550 $ 923,880 Accounts receivable (net) 781,280 712,600 Inventories 1,184,800 1,090,360 Prepaid expenses 27,470 32,620 Land 295,340 446,450 Buildings 1,365,090 841,380 Accumulated depreciation-buildings (386,350) (360,590) Equipment 480,790 424,980 Accumulated depreciation-equipment (132,220) (148,530) Total assets $4,474,750 $3,963,150 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $ 850,200 $ 897,180 Bonds payable 250,590 0 Common stock, $20 par 295,000 109,000 Paid-in capital: Excess of issue price over par-common stock 708,000 522,000 Retained earnings 2,370,960 2,434,970 Total liabilities and stockholders’ equity $4,474,750 $3,963,150 The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 20Y2 are as follows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 446,450 Apr. 20 Realized $140,500 cash from sale 151,110 295,340 ACCOUNT Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 841,380 Apr. 20 Acquired for cash 523,710 1,365,090 ACCOUNT Accumulated Depreciation-Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 360,590 Dec. 31 Depreciation for year 25,760 386,350 ACCOUNT Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 424,980 Jan. 26 Discarded, no salvage 46,700 378,280 Aug. 11 Purchased for cash 102,510 480,790 ACCOUNT Accumulated Depreciation-Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 148,530 Jan. 26 Equipment discarded 46,700 101,830 Dec. 31 Depreciation for year 30,390 132,220 ACCOUNT Bonds Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 May 1 Issued 15-year bonds 250,590 250,590 ACCOUNT Common Stock, $20 par ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 109,000 Dec. 7 Issued 9,300 shares of common stock for $40 per share 186,000 295,000 ACCOUNT Paid-in Capital in Excess of Par-Common Stock ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 522,000 Dec. 7 Issued 9,300 shares of common stock for $40 per share 186,000 708,000 ACCOUNT Retained Earnings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 2,434,970 Dec. 31 Net loss 30,820 2,404,150 Dec. 31 Cash dividends 33,190 2,370,960 Required: 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. Whitman Co. Statement of Cash Flows For the Year Ended December 31, 20Y2 Cash flows from operating activities: $fill in the blank 2 Adjustments to reconcile net loss to net cash flow from operating activities: fill in the blank 4 fill in the blank 6 Changes in current operating assets and liabilities: fill in the blank 8 fill in the blank 10 fill in the blank 12 fill in the blank 14 Net cash flow used for operating activities $fill in the blank 15 Cash flows from (used for) investing activities: $fill in the blank 17 fill in the blank 19 fill in the blank 21 Net cash flow used for investing activities fill in the blank 22 Cash flows from (used for) financing activities: $fill in the blank 24 fill in the blank 26 fill in the blank 28 Net cash flow from financing activities fill in the blank 29 $fill in the blank 31 Cash at the beginning of the year fill in the blank 32 Cash at the end of the year $fill in the blank 33

Statement of Cash Flows—Indirect Method The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $ 858,550 $ 923,880 Accounts receivable (net) 781,280 712,600 Inventories 1,184,800 1,090,360 Prepaid expenses 27,470 32,620 Land 295,340 446,450 Buildings 1,365,090 841,380 Accumulated depreciation-buildings (386,350) (360,590) Equipment 480,790 424,980 Accumulated depreciation-equipment (132,220) (148,530) Total assets $4,474,750 $3,963,150 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $ 850,200 $ 897,180 Bonds payable 250,590 0 Common stock, $20 par 295,000 109,000 Paid-in capital: Excess of issue price over par-common stock 708,000 522,000 Retained earnings 2,370,960 2,434,970 Total liabilities and stockholders’ equity $4,474,750 $3,963,150 The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 20Y2 are as follows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 446,450 Apr. 20 Realized $140,500 cash from sale 151,110 295,340 ACCOUNT Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 841,380 Apr. 20 Acquired for cash 523,710 1,365,090 ACCOUNT Accumulated Depreciation-Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 360,590 Dec. 31 Depreciation for year 25,760 386,350 ACCOUNT Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 424,980 Jan. 26 Discarded, no salvage 46,700 378,280 Aug. 11 Purchased for cash 102,510 480,790 ACCOUNT Accumulated Depreciation-Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 148,530 Jan. 26 Equipment discarded 46,700 101,830 Dec. 31 Depreciation for year 30,390 132,220 ACCOUNT Bonds Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 May 1 Issued 15-year bonds 250,590 250,590 ACCOUNT Common Stock, $20 par ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 109,000 Dec. 7 Issued 9,300 shares of common stock for $40 per share 186,000 295,000 ACCOUNT Paid-in Capital in Excess of Par-Common Stock ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 522,000 Dec. 7 Issued 9,300 shares of common stock for $40 per share 186,000 708,000 ACCOUNT Retained Earnings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 2,434,970 Dec. 31 Net loss 30,820 2,404,150 Dec. 31 Cash dividends 33,190 2,370,960 Required: 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. Whitman Co. Statement of Cash Flows For the Year Ended December 31, 20Y2 Cash flows from operating activities: $fill in the blank 2 Adjustments to reconcile net loss to net cash flow from operating activities: fill in the blank 4 fill in the blank 6 Changes in current operating assets and liabilities: fill in the blank 8 fill in the blank 10 fill in the blank 12 fill in the blank 14 Net cash flow used for operating activities $fill in the blank 15 Cash flows from (used for) investing activities: $fill in the blank 17 fill in the blank 19 fill in the blank 21 Net cash flow used for investing activities fill in the blank 22 Cash flows from (used for) financing activities: $fill in the blank 24 fill in the blank 26 fill in the blank 28 Net cash flow from financing activities fill in the blank 29 $fill in the blank 31 Cash at the beginning of the year fill in the blank 32 Cash at the end of the year $fill in the blank 33

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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Question

Statement of Cash Flows—Indirect Method

The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:

	Dec. 31, 20Y2	Dec. 31, 20Y1
Assets
Cash	$ 858,550		$ 923,880
Accounts receivable (net)	781,280		712,600
Inventories	1,184,800		1,090,360
Prepaid expenses	27,470		32,620
Land	295,340		446,450
Buildings	1,365,090		841,380
Accumulated depreciation-buildings	(386,350)		(360,590)
Equipment	480,790		424,980
Accumulated depreciation-equipment	(132,220)		(148,530)
Total assets	$4,474,750		$3,963,150
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$ 850,200		$ 897,180
Bonds payable	250,590		0
Common stock, $20 par	295,000		109,000
Paid-in capital: Excess of issue price over par-common stock	708,000		522,000
Retained earnings	2,370,960		2,434,970
Total liabilities and stockholders’ equity	$4,474,750		$3,963,150

The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 20Y2 are as follows:

ACCOUNT Land	ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance			446,450
Apr. 20	Realized $140,500 cash from sale		151,110	295,340

ACCOUNT Buildings	ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance			841,380
Apr. 20	Acquired for cash	523,710		1,365,090

ACCOUNT Accumulated Depreciation-Buildings	ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				360,590
Dec. 31	Depreciation for year		25,760		386,350

ACCOUNT Equipment	ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance			424,980
Jan. 26	Discarded, no salvage		46,700	378,280
Aug. 11	Purchased for cash	102,510		480,790

ACCOUNT Accumulated Depreciation-Equipment	ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				148,530
Jan. 26	Equipment discarded	46,700			101,830
Dec. 31	Depreciation for year		30,390		132,220

ACCOUNT Bonds Payable	ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
May 1	Issued 15-year bonds		250,590		250,590

ACCOUNT Common Stock, $20 par	ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				109,000
Dec. 7	Issued 9,300 shares of common stock for $40 per share		186,000		295,000

ACCOUNT Paid-in Capital in Excess of Par-Common Stock	ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				522,000
Dec. 7	Issued 9,300 shares of common stock for $40 per share		186,000		708,000

ACCOUNT Retained Earnings	ACCOUNT NO.
				Balance
Date	Item	Debit	Credit	Debit	Credit
20Y2
Jan. 1	Balance				2,434,970
Dec. 31	Net loss	30,820			2,404,150
Dec. 31	Cash dividends	33,190			2,370,960

Required:

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.

Whitman Co.
Statement of Cash Flows
For the Year Ended December 31, 20Y2
Cash flows from operating activities:
	$fill in the blank 2
Adjustments to reconcile net loss to net cash flow from operating activities:
	fill in the blank 4
	fill in the blank 6
Changes in current operating assets and liabilities:
	fill in the blank 8
	fill in the blank 10
	fill in the blank 12
	fill in the blank 14
Net cash flow used for operating activities		$fill in the blank 15
Cash flows from (used for) investing activities:
	$fill in the blank 17
	fill in the blank 19
	fill in the blank 21
Net cash flow used for investing activities		fill in the blank 22
Cash flows from (used for) financing activities:
	$fill in the blank 24
	fill in the blank 26
	fill in the blank 28
Net cash flow from financing activities		fill in the blank 29
		$fill in the blank 31
Cash at the beginning of the year		fill in the blank 32
Cash at the end of the year		$fill in the blank 33

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