
Spreadsheet for Cash Flow Statement:
Spreadsheet for cash flow statement is another technique of analyzing the
To Determine: The Spreadsheet for Cash flows Statement analysis to be prepared.

Answer to Problem 4BPSB
Solution: TheSpreadsheet for Cash flow Statement analysis has been prepared as follows:
Spreadsheet for Statement of Cash Flows-Indirect Method | ||||||||
for the year ending December31, 2015 | ||||||||
31-Dec | Analysis of Changes | 31-Dec | ||||||
2014 | Debit | Credit | 2015 | |||||
Balance Sheet-Debit Bal. Accounts | ||||||||
Cash | 61550 | 123450 | ||||||
Accounts receivable | 80750 | d. | 3650 | 77100 | ||||
Inventory | 250700 | e. | 10100 | 240600 | ||||
Prepaid expense | 17000 | f. | 1900 | 15100 | ||||
Equipment | 200000 | h. | 113250 | c. | 51000 | 262250 | ||
610000 | 718500 | |||||||
Balance Sheet-Credit Bal. Accounts | ||||||||
| 95000 | c. | 22850 | b. | 38600 | 110750 | ||
Accounts payable | 102000 | g. | 84250 | |||||
Short term Notes payable | 10000 | i. | 5000 | 15000 | ||||
Long term Notes payable | 77500 | j. | 47500 | m. | 70000 | 100000 | ||
Common Stockk | 200000 | k. | 15000 | 215000 | ||||
Paid in capital in excess of par | 0 | k. | 30000 | 30000 | ||||
| 125500 | l. | 53600 | a. | 158100 | 230000 | ||
610000 | 718500 | |||||||
Statement of Cash flows: | ||||||||
Operating Activities: | ||||||||
Net income | a. | 158100 | ||||||
Depreciation | b. | 38600 | ||||||
Loss on Sale of equipment | c. | 2100 | ||||||
Decrease in Accounts receivable | d. | 3650 | ||||||
Decrease in Inventory | e. | 10100 | ||||||
Decrease in prepaid insurance | f. | 1900 | ||||||
Decrease in Accounts payable | g. | 84250 | ||||||
Investing Activities | ||||||||
Sale of Equipment | c. | 26050 | ||||||
Purchase of Equipment | h. | 43250 | ||||||
Financing Activities | ||||||||
Borrowings under Short term notes | i. | 5000 | ||||||
Repayment of Long term notes | j. | 47500 | ||||||
Issue of Common Stock | k. | 45000 | ||||||
Dividend paid | l. | 53600 | ||||||
Non Cash investing and Financing Activities | ||||||||
Purchase of Equipment by issuing Long term notes | m. | 70000 | h. | 70000 | ||||
543860 | 543860 |
Explanation of Solution
Cash-flows from Operating Activities: The Various items reflecting in the cash flows from operating activities have been reconciled with the balance sheet as under:
*Net income taken in cash flows is from the changes in retained earnings in the balance sheet (other part of change in retained earnings is due to dividend paid which will be reconciled in financing activities)
*
*Loss on sale of equipment along with accumulated depreciation on sold assets and cash received on sold assets is reconciled with change in equipment account balance.
*Changes in Accounts receivable, Inventory, Prepaid expense and Accounts payable has been properly reconciled with balances in balance sheet.
Cash-flows from Investing Activities: The Various items of cash flows from investing activities have been reconciled withbalance sheet items as under:
*Total change in balance of equipment has been divided in two parts, one debit change due to purchase (which has been categorized as cash purchase and non-cash purchase through issue of long term notes.
*Other change is credit change due to assets sold(which is further divided in to accumulated depreciation on sold assets, cash received on sold assets and loss on sale of asset).
Cash-flows from financing Activities: The Various items in financing activities has been reconciled as under:
*Short term borrowings is reconciled with the change in balance in balance sheet.
*Repayment of long term notes has been made and this change along with non-cash acquisition of assets has been reconciled with the total change in long term notes payable.
*Issue of shares at above premium reflecting the changes in two accounts of balance sheet i.e. common stock and paid in capital above par.
*Dividend paid is second change in retained earnings as discussed initially along with the net income.
Non-Cash Investing and Financing activities: The one transaction of assets acquired by issuing long term notes payable has been reconciled as already been discussed.
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