Prepare a statement of cash flows for the year using the INDIRECT METHOD? (2.5 marks) Condensed...

Transcribed Image Text:

Prepare a statement of cash flows for the year using the INDIRECT METHOD? (2.5 marks) Condensed financial data of A&J Company appear below: Cash Accounts receivable Inventories Equipment Accumulated depreciation equipment Total Accounts payable Bonds payable Common stock Retained earnings Total A&J COMPANY Comparative Balance Sheet December 31 Assets Dec. 31,20X2 Liabilities and Stockholders' Equity $28,200 24,200 23,000 60,000 (14,000) $121,400 $19,600 10,000 60,000 31,800 $121,400 Dec. 31,20X1 $17,700 22,300 16,000 70,000 (10,000) 116,000 $11,100 30,000 45,000 29,900 $116,00 Additional information: 1. Net income was $28,300. Dividends declared and paid were $26,400. 2. Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $4,300.Hint Loss on Sale of Equipment (10000-1200-4300-4500) and Depreciation (4000+1200-5,200) 3. All other changes in non-current account balances had a direct effect on cash flows, except the change in accumulated depreciation. Prepare a statement of cash flows for the year using the INDIRECT METHOD? (2.5 marks) Condensed financial data of A&J Company appear below: Cash Accounts receivable Inventories Equipment Accumulated depreciation equipment Total Accounts payable Bonds payable Common stock Retained earnings Total A&J COMPANY Comparative Balance Sheet December 31 Assets Dec. 31,20X2 Liabilities and Stockholders' Equity $28,200 24,200 23,000 60,000 (14,000) $121,400 $19,600 10,000 60,000 31,800 $121,400 Dec. 31,20X1 $17,700 22,300 16,000 70,000 (10,000) 116,000 $11,100 30,000 45,000 29,900 $116,00 Additional information: 1. Net income was $28,300. Dividends declared and paid were $26,400. 2. Equipment which cost $10,000 and had accumulated depreciation of $1,200 was sold for $4,300.Hint Loss on Sale of Equipment (10000-1200-4300-4500) and Depreciation (4000+1200-5,200) 3. All other changes in non-current account balances had a direct effect on cash flows, except the change in accumulated depreciation.

Answer rating: 100% (QA)

Cash flows from operating activities Net Income Adjustments to reconcile net incometo ne... View the full answer