CP$12-3$ Preparing a Statement of Cash Flows $($Indirect Method$)$

LO $12-2,12-3,12-4,12-5$

Hunter Company is developing its annual financial statements at December $31.$ The statements are

complete except for the statement of cash flows. The completed comparative balance sheets and

income statement are summarized:

CHAPTER $12$ Statement of Cash Flows

Additional Data:

a$.$ Bought equipment for cash, $$9,000.$

b$.$ Paid $$10,000$ on the long$-$term notes payable.

c$.$ Issued new shares of stock for $$20,000$ cash.

d$.$ Declared and paid a $$3,800$ cash dividend.

e$.$ Other expenses included depreciation, $$6,000$; salaries and wages, $$10,000$; taxes, $$3,000$;

utilities, $$8,000.$

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:

Prepare the statement of cash flows for the year ended December $31$ using the indirect method.

Use the statement of cash flows to evaluate Hunter's cash flows.

TIP: Demonstration Case A provides a good example of information to consider when

evaluating cash flows.CP$12-3$Preparing a Statement of Cash Flows $($Indirect Method$)$

Hunter Company is developing its annual financial statements at December $31.$ The statements are

complete except for the statement of cash flows. The completed comparative balance sheets and

income statement are summarized