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
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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:

  1. Net income is $62,000.
  2. The company purchases $103,000 in equipment.
  3. Depreciation expense is $155,000.
  4. The company repays $117,500 in notes payable.
  5. 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
Transcribed Image Text: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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