The balance sheets for a company, along with additional information, are provided below: Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets: Cash $ 155,850 $ 174,600 Accounts receivable 75,200 88,500 Inventory 88,000 73,700 Prepaid rent 2,600 1,300 Long-term assets: Land 445,000 445,000 Equipment 738,000 635,000 Accumulated depreciation (409,000 ) (254,000 ) Total assets $ 1,095,650 $ 1,164,100 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 92,000 $ 78,700 Interest payable 7,050 14,100 Income tax payable 6,600 4,300 Long-term liabilities: Notes payable 117,500 235,000 Stockholders' equity: Common stock 665,000 665,000 Retained earnings 207,500 167,000 Total liabilities and stockholders' equity $ 1,095,650 $ 1,164,100 Additional Information for 2021: Net income is $62,000. The company purchases $103,000 in equipment. Depreciation expense is $155,000. The company repays $117,500 in notes payable. The company declares and pays a cash dividend of $21,500. Required: Prepare the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)

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

The balance sheets for a company, along with additional information, are provided below:

Balance Sheets December 31, 2021 and 2020
	2021		2020
Assets
Current assets:
Cash	$	155,850		$	174,600
Accounts receivable		75,200			88,500
Inventory		88,000			73,700
Prepaid rent		2,600			1,300
Long-term assets:
Land		445,000			445,000
Equipment		738,000			635,000
Accumulated depreciation		(409,000	)		(254,000	)
Total assets	$	1,095,650		$	1,164,100
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	92,000		$	78,700
Interest payable		7,050			14,100
Income tax payable		6,600			4,300
Long-term liabilities:
Notes payable		117,500			235,000
Stockholders' equity:
Common stock		665,000			665,000
Retained earnings		207,500			167,000
Total liabilities and stockholders' equity	$	1,095,650		$	1,164,100

Additional Information for 2021:

Net income is $62,000.
The company purchases $103,000 in equipment.
Depreciation expense is $155,000.
The company repays $117,500 in notes payable.
The company declares and pays a cash dividend of $21,500.

Required:
Prepare the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)

Statement of Cash Flows
For the Year Ended December 31, 2021
Cash Flows from Operating Activities
Adjustments to reconcile net income to net
cash flows from operating activities
Net cash flows from operating activities
Cash Flows from Investing Activities
Net cash flows from investing activities
Cash Flows from Financing Activities
Net cash flows from financing activities
Cash at the beginning of the period
Cash at the end of the period

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