Module 04 Problem: Cash Flow Statement Using the information below, prepare the cash flow statement for Dan's Dependable Delivery. Use formulas in for math operations. The current year is labeled 20XX and the prior year is labeled 20WW. Dan's Dependable Delivery Dan's Dependable Delivery Comparative Balance Sheet Income Statement December 31, 20XX For the Year Ended 20XX 20XX 20WW Increase (Decrease) 20XX ASSETS Revenues: Current Assets: sales 1,100,000 Cash and cash equivalents 140,350 95,900 44,450 Cost of Goods Sold 710,000 Accounts receivable 95,300 102,300 -7,000 Gross Profit 390,000 Inventory 165,200 157,900 7,300 Operating Expenses: Prepaid expenses 6,240 5,860 380 Depreciation 23,500 Investments (long term) 35,700 84,700 -49,000 Patent Amortization 7,000 Plant Assets: Other operating expenses 196,000 Land 75,000 90,000 -15,000 Total Operating Expenses: 226,500 Buildings (net) 303,700 201,700 102,000 Income from operations 163,500 Equipment, net 279,800 290,300 -10,500 Other Income: Patents 58,000 65,000 -7,000 Gain on sale of investments 11,000 Total Assets 1,159,290 1,093,660 65,630 Other Expenses: Interest Expense 26,000 -15,000 LIABILITIES Income before income tax 148,500 Current Liabilities: Income tax expense 50,000 Accounts Payable 43,500 46,700 -3,200 Net Income 98,500 Accrued Liabilities 14,000 12,500 1,500 Income Taxes Payable 7,900 8,400 -500 Dividends Payable 14,000 10,000 4,000 Long Term Liabilities: Mortgage note payable 40,000 40,000 Bonds Payable 150,000 250,000 -100,000 Total Liabilities 269,400 327,600 -58,200 STOCKHOLDERS' EQUITY Common Stock 450,000 375,000 75,000 Additional paid in capital-common 66,250 41,250 25,000 Retained Earnings 373,640 349,810 23,830 Total Stockholders' Equity 889,890 766,060 123,830 Total Liabilities and Stockholders' Equity 1,159,290 1,093,660 65,630 Other Information: An examination of the accounting records revealed the following for 20XX: Land costing $15,000 was sold for $15,000 A mortgage note was issued for $40,000 A building costing $115,000 was constructed 2,500 shares of common stock were issued at 40 in exchange for the bonds payable Cash dividends declared were $74,670 Using the indirect method, prepare the statement of cash flows for Dan's Dependable Delivery for the year ended 20XX. Numbers go in shaded areas. Use Excel formulas for all math operations. Dan's Dependable Delivery Statement of Cash Flows-Indirect Method For the Year Ended 20XX Cash Flows From Operating Activities: Net Income $98,500 Reconcilliation of net income to net cash flow: Depreciation 23,500 Amortization 7,000 Gain on Sale of Investments (11,000) Changes in Current Assets and Liabilities Decrease in Accounts Receivable 7,000 Increase in Inventory (7,300) Increase in Prepaid Expenses (380) Decrease in Accounts Payable (3,200) Increase in Accured Liabilities 1,500 Decrease in Income Taxes Payable (500) Net Cash Flow from Operating Activities 115,120 Cash Flows From Investing Activities: Cash received from the sale of: Investments 49,000 Land 15,000 64,000 Less Cash paid for Construction of Building (115,000) Net Cash Flow from Investing Activities (51,000) Cash Flows From Financing Activities: Cash received from issuing of mortgage note payable 40,000 Less cash paid for dividends (74,670) Net Cash Flow from Financing Activities (34,670) Increases in Cash 29,450 Cash at the Beginning of the Year 115,290 Cash at the End of the Year $1,093,660 Schedule of Noncash Investing and Financing Activities: Issued common stock to retire bonds payable $65,630 In a short paragraph below, explain the cash flow statement to Dan. How is his company doing? Address operating, investing and financing activities. Does cash flow from operating activities cover cash flow from investing and financing activities? What does this mean? Can you help me with figuring where I went wrong?