Accounts payable increase Accounts receivable increase Accrued liabilities decrease Amortization expense Cash balance, January 1 Cash balance, December 31 Cash paid as dividends Cash paid to purchase land Cash paid to retire bonds payable at par Cash received from issuance of common stock Cash received from sale of equipment Depreciation expense Gain on sale of equipment Inventory decrease Net income Prepaid expenses increase Average current liabilities $13,500 6,000 4,500 9,000 33,000 22,500 43.500 135,000 90,000 52,500 25,500 43,500 6,000 19,500 114,000 3,000 150,000 a. Use negative signs with cash outflow answers. LUND CORPORATION Statement of Cash Flows For Year Ended December 31 Cash Flow from Operating Activities Net Income $ 114,000 Add (deduct) items to convert net income to cash basis Depreciation 43,500 Amortization 9,000 Gain on Sale of Equipment (6,000) Accounts Receivable Increase (6,000) Inventory Decrease 19,500 Prepaid Expenses Increase (3.000) Accounts Payable Increase 13,500 Accrued Liabilities Decrease (4,500) Cash Flow Provided by Operating Activities Cash Flow from Investing Activities Sale of Equipment 25,500 Purchase of Land (135,000) Cash Used by Investing Activities (109,500) Cash Flow from Financing Activities Issuance of Common Stock 52,500 Retirement of Bonds Payable (90,000) Payment of Dividends (43,500) Cash Used by Financing Activities (81,000) Net Decrease in Cash (10,500) Cash at Beginning of Year 33,000 Cash at End of Year 22,500 b. Operating-cash-flow-to-current-liabilities ratio (Round answers to two decimal places.) 1.15