Indirect Method$$ Preparing a Statement of Cash Flows

Kidman Corp. reported the following financial statements.

Balance Sheet, December $31$ Prior Year Current Year Difference

Cash and cash equivalents $$24,000$ $$62,000$ $$38,000$

Accounts receivable $19,00015,000(4,000)$

Merchandise inventory $31,00059,00028,000$

Land $20,0004,000(16,000)$

Equipment $48,00072,00024,000$

Accumulated depreciation $(12,000)(24,000)(12,000)$

Total assets $$130,000$ $$188,000$ $$58,000$

Accounts payable $$16,000$ $$18,000$ $$2,000$

Notes payable, long$-$term $7,0002,000(5,000)$

Bonds payable $-30,00030,000$

Common stock $($no$-$par$)80,00092,00012,000$

Retained earnings $27,00046,00019,000$

Total liabilities and stockholders' equity $$130,000$ $$188,000$ $$58,000$

Income Statement

For the Current Year Ended December $31$

Revenues $$152,000$

Cost of goods sold $82,000$

Depreciation $12,000$

Other expenses $14,000$

Loss on sale of land $10,000$

Net income $$34,000$

Prepare the statement of cash flows for the current year ended December $31,$ using the indirect method to present cash flows from operating activities.

$$Note: Include a negative sign $(-)$ for any amount that would be subtracted in the statement of cash flows.

Statement of Cash Flows

For the Current Year Ended December $31$

Cash flows from operating activities

Net income

$34,000$

Answer $1$

Adjustments:

Depreciation expense

$12,000$

Answer $2$

Loss on sale of land

$10,000$

Answer $3$

Answer $4$

Change in merchandise inventory

$(28,000)$

Answer $5$

Change in accounts payable

$2,000$

Answer $6$

Net cash from operating activities

$34,000$

Answer $7$

Cash flows from investing activities

Purchase of equipment

$(24,000)$

Answer $8$

Sale of land

$16,000$

Answer $9$

Net cash from investing activities

$(8,000)$

Answer $10$

Cash flows from financing activities

Issuance of bond payable

$0$

Answer $11$

Answer $12$

Answer $13$

Answer $14$

Answer $15$

Answer $16$

Answer $17$

Answer $18$