BGP Electrical Supply is developing its annual financial statements at December 31, current year. The statements are

Question:

BGP Electrical Supply is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:

Additional Data:
a. Bought equipment for cash, $21,000.
b. Paid $6,000 on the long-term note payable.
c. Issued new shares of stock for $16,000 cash.
d. No dividends were declared or paid.
e. Other expenses included depreciation, $5,000; wages, $20,000; taxes, $6,000; other, $6,800.
f. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.


Required:
1. Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method.
2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash during the current year.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Accounting

ISBN: 9781264229734

11th Edition

Authors: Robert Libby, Patricia Libby, Frank Hodge

Question Posted: