Statement of Cash Flows—Indirect MethodThe comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Dec. 31, 20Y8Dec. 31, 20Y7Assets Cash$60,730 $74,190 Accounts receivable (net)93,320 100,020 Merchandise inventory133,320 123,960 Prepaid expenses5,430 3,760 Equipment271,560 222,100 Accumulated depreciation-equipment(70,610) (54,470) Total assets$493,750 $469,560 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors)$103,690 $98,140 Mortgage note payable0 140,870 Common stock, $1 par16,000 10,000 Paid-in capital: Excess of issue price over par-common stock234,000 132,000 Retained earnings140,060 88,550 Total liabilities and stockholders’ equity$493,750 $469,560 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:Net income, $131,870.Depreciation reported on the income statement, $34,570.Equipment was purchased at a cost of $67,890, and fully depreciated equipment costing $18,430 was discarded, with no salvage realized.The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.6,000 shares of common stock were issued at $18 for cash.Cash dividends declared and paid, $80,360.Required:Prepare a statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.Yellow Dog Enterprises Inc.Statement of Cash FlowsFor the Year Ended December 31, 20Y8Cash flows from operating activities: $fill in the blank 2 Adjustments to reconcile net income to net cash flow from operating activities: fill in the blank 4 Changes in current operating assets and liabilities: fill in the blank 6 fill in the blank 8 fill in the blank 10 fill in the blank 12 Net cash flow from operating activities $fill in the blank 13Cash flows from (used for) investing activities: $fill in the blank 15 Net cash flow used for investing activities fill in the blank 16Cash flows from (used for) financing activities: $fill in the blank 18 fill in the blank 20 fill in the blank 22 Net cash flow used for financing activities fill in the blank 23 $fill in the blank 25Cash at the beginning of the year fill in the blank 26Cash at the end of the year

Cash Flow Statement -: Cash Flow Statement is prepared to evaluate the financing, operating, and…

Answered: Statement of Cash Flows—Indirect Method…

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 Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:

	Dec. 31, 20Y8	Dec. 31, 20Y7
Assets
Cash	$60,730		$74,190
Accounts receivable (net)	93,320		100,020
Merchandise inventory	133,320		123,960
Prepaid expenses	5,430		3,760
Equipment	271,560		222,100
Accumulated depreciation-equipment	(70,610)		(54,470)
	Total assets	$493,750		$469,560

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$103,690		$98,140
Mortgage note payable	0		140,870
Common stock, $1 par	16,000		10,000
Paid-in capital: Excess of issue price over par-common stock	234,000		132,000
Retained earnings	140,060		88,550
	Total liabilities and stockholders’ equity	$493,750		$469,560

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:

Net income, $131,870.
Depreciation reported on the income statement, $34,570.
Equipment was purchased at a cost of $67,890, and fully depreciated equipment costing $18,430 was discarded, with no salvage realized.
The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
6,000 shares of common stock were issued at $18 for cash.
Cash dividends declared and paid, $80,360.

Required:

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

Yellow Dog Enterprises Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y8
Cash flows from operating activities:
	$fill in the blank 2
Adjustments to reconcile net income to net cash flow from operating activities:
	fill in the blank 4
Changes in current operating assets and liabilities:
	fill in the blank 6
	fill in the blank 8
	fill in the blank 10
	fill in the blank 12
Net cash flow from operating activities		$fill in the blank 13
Cash flows from (used for) investing activities:
	$fill in the blank 15
Net cash flow used for investing activities		fill in the blank 16
Cash flows from (used for) financing activities:
	$fill in the blank 18
	fill in the blank 20
	fill in the blank 22
Net cash flow used for financing activities		fill in the blank 23
		$fill in the blank 25
Cash at the beginning of the year		fill in the blank 26
Cash at the end of the year

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