The professional simulation for this chapter asks you to address questions related to the accounting for the statement of cashflows.

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KWW Professional Simulation 2 Statement of Cash Flows Time Remaining 1 hour 00 minutes Unspit Splt Horiz Spit Verical Spresdsheet Calculator Exit Situation Financial Statoments Explanation Resources Directions Elwood House, Inc. had the following condensed balance sheet at the end of 2012. ELLWOOD HOUSE, INC. Balance Sheet December 31, 2012 $ 10,000 34,000 40,000 57,500 38,500 Current liabilities Long-term notes payable Bonds payable Common stock Retained eamings Cash Current assets (non-cash) Investments $ 14,500 30,000 32,000 80,000 23,500 Plant assets Land $180,000 $180,000 During 2013, the following occurred. 1. Elwood House, Inc., sold part of its investment portfolio, which was classified as available-for-sale, for $15,500, resulting in a gain of $500 for the firm. Dividends totaling $19,000 were paid to stockholders. 3. A parcel of land was purchased for $5,500. 4. $20,000 of common stock were issued at par. 5. S10,000 of bonds payable were retired at par. 6. Heavy equipment was purchased through the issuance of $32,000 of bonds. 7. Net income for 2013 was $42,000 after deducting depreciation of $13,550. 8. Both current assets (other than cash) and current liabilities remained at the same amount. Situation Financiai Statemonts Explanation Resources Directions Prepare a statement of cash flows for 2013, using the indirect method. Sitation Financiai Statemente Explanation Resources Directions Draft a one-page letter to Gerald Brauer, president of Elwood House, Inc., briefly explaining the changes within each major cash flow category. Refer to your cash flow statement whenever necessary.