Statement of cash flows$$indirect method

Instructions

Labels and Amount Descriptions

Statement of Cash Flows

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Instructions

The comparative balance sheet of Livers Inc. for December $31,20$Y$3$ and $20$Y$2,$ is shown as follows:

$1$

$$

Dec. $31,20$Y$3$

Dec. $31,20$Y$2$

$2$

Assets

$$

$$

$3$

Cash

$$155,000\mathrm{.}00$

$$150,000\mathrm{.}00$

$4$

Accounts receivable $($net$)$

$450,000\mathrm{.}00$

$400,000\mathrm{.}00$

$5$

Inventories

$770,000\mathrm{.}00$

$750,000\mathrm{.}00$

$6$

Investments

$0\mathrm{.}00$

$100,000\mathrm{.}00$

$7$

Land

$500,000\mathrm{.}00$

$0\mathrm{.}00$

$8$

Equipment

$1,400,000\mathrm{.}00$

$1,200,000\mathrm{.}00$

$9$

Accumulated depreciation$-$equipment

$(600,000\mathrm{.}00)$

$(500,000\mathrm{.}00)$

$10$

Total assets

$$2,675,000\mathrm{.}00$

$$2,100,000\mathrm{.}00$

$11$

Liabilities and Stockholders$$ Equity

$$

$$

$12$

Accounts payable $($merchandise creditors$)$

$$340,000\mathrm{.}00$

$$300,000\mathrm{.}00$

$13$

Accrued expenses payable $($operating expenses$)$

$45,000\mathrm{.}00$

$50,000\mathrm{.}00$

$14$

Dividends payable

$30,000\mathrm{.}00$

$25,000\mathrm{.}00$

$15$

Common stock, $$4$ par

$700,000\mathrm{.}00$

$600,000\mathrm{.}00$

$16$

Paid$-$in capital in excess of par$$common stock

$200,000\mathrm{.}00$

$175,000\mathrm{.}00$

$17$

Retained earnings

$1,360,000\mathrm{.}00$

$950,000\mathrm{.}00$

$18$

Total liabilities and stockholders$$ equity

$$2,675,000\mathrm{.}00$

$$2,100,000\mathrm{.}00$

Additional data obtained from an examination of the accounts in the ledger for $20$Y$3$ are as follows:

a$.$ The investments were sold for $$175,000$ cash.b$.$ Equipment and land were acquired for cash.c$.$ There were no disposals of equipment during the year.d$.$ The common stock was issued for cash.e$.$ There was a $$500,000$ credit to Retained Earnings for net income.f$.$ There was a $$90,000$ debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from $($used for$)$ operating activities.

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Statement of Cash Flows

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Prepare a statement of cash flows, using the indirect method of presenting cash flows from $($used for$)$ operating activities.

Statement of Cash Flows Instructions

Score: $10/187$

Livers Inc.

Statement of Cash Flows

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Adjustments to reconcile net income to net cash flows from $($used for$)$ operating activities:

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Changes in current operating assets and liabilities:

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Points:

$2\mathrm{.}14/40$

Feedback

Check My Work

Compute the increases and decreases in the current asset$/$liability accounts over the period. How do these increases or decreases impact the amount of cash a company has? Were there any purchases or sales of noncurrent assets during the year? If there were any sales of noncurrent assets, were these noncurrent assets sold at what the company had initially paid? Or were the assets sold for more or less than the book value? Did the company engage in any activities that affected the equity or debt in their company?