Service Company had net income during the current year of $111,000 The following information was obtained from the balance sheet of Service Company Accounts receivable $20,000 increase Inventory 25,000 increase Accounts payable 16,000 decrease Interest payable 9,000 increase Accumulated depreciatio...

1 Cash flows from operating activities Net income 111000 Adjustme ...

Service Company had net income during the current year of $111,000. The following information was obtained from

Question:

Service Company had net income during the current year of $111,000. The following information was obtained from the of Service Company:
Accounts receivable ............ $20,000 increase
Inventory ................ 25,000 increase
Accounts payable ............ 16,000 decrease
Interest payable ............ 9,000 increase
Accumulated depreciation, equipment* .... 27,000 increase
Accumulated depreciation, building ..... 12,000 increase
Retained earnings**
* Equipment with accumulated depreciation of $15,000 was sold during the year.
** Includes net income of $111,000 and cash dividends paid of $36,000

Required:
1. Prepare the net cash flows from operating activities using the indirect method.
2. How would the cash proceeds from the sale of equipment be reported on the statement of cash flows?
3. How would the cash dividends be reported on the statement of cash flows?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...