The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:

		Dec. 31, 20Y2	Dec. 31, 20Y1
1	Assets
2	Cash	$183	$14
3	Accounts receivable (net)	55	49
4	Inventories	117	99
5	Land	250	330
6	Equipment	205	175
7	Accumulated depreciation-equipment	(68)	(42)
8	Total assets	$742	$625
9	Liabilities and Stockholders’ Equity
10	Accounts payable (merchandise creditors)	$51	$37
11	Dividends payable	5
12	Common stock, $1 par	125	80
13	Paid-in capital: Excess of issue price over par—common stock	85	70
14	Retained earnings	476	438
15	Total liabilities and stockholders’ equity	$742	$625

The following additional information is taken from the records:

1.	Land was sold for $120.
2.	Equipment was acquired for cash.
3.	There were no disposals of equipment during the year.
4.	The common stock was issued for cash.
5.	There was a $62 credit to Retained Earnings for net income.
6.	There was an $24 debit to Retained Earnings for cash dividends declared.

Required:

A.

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

B.

Was the net cash flow from operations for Olson-Jones Industries Inc. more or less than net income? What is the source of this difference?

Labels and Amount Descriptions

Amortization of intangible assets

Cash used for dividends

Cash used for purchase of equipment

Cash from sale of common stock

Cash from sale of land

December 31, 20Y2

Decrease in accounts payable

Decrease in accounts receivable

Decrease in cash

Decrease in inventories

Depreciation

For the Year Ended December 31, 20Y2

Gain on sale of land

Increase in accounts payable

Increase in accounts receivable

Increase in cash

Increase in inventories

Loss on sale of land

Net cash flow from operating activities

Net cash flow used for operating activities

Net cash flow from investing activities

Net cash flow used for investing activities

Net cash flow from financing activities

Net cash flow used for financing activities

Net income

Net loss

A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Olson-Jones Industries Inc.

Statement of Cash Flows

1	Cash flows from operating activities:
2
3	Adjustments to reconcile net income to net cash flow from operating activities:
4
5
6	Changes in current operating assets and liabilities:
7
8
9
10
11	Cash flows from (used for) investing activities:
12
13
14
15	Cash flows from (used for) financing activities:
16
17
18
19
20	Cash at the beginning of the year
21	Cash at the end of the year B. Was the net cash flow from operations for Olson-Jones Industries Inc. more or less than net income? What is the source of this difference? Net cash flow from operations was than net income. The source(s) of the difference are: Check all that apply. Depreciation expense Sale of common stock Changes in current operating assets and liabilities Purchase of equipment Gain on the sale of land Dividends paid

Answer rating: 100% (QA)

a Olson Jones Industries Inc Statement of Cash Flows For the Year Ending December 31 20Y2 1 Cash flows from operating activities 2 Net Income 62 3 Adj... View the full answer