Question

The three accounts shown below appear in the general ledger of Cullumber Corp. during 2021.

Equipment
Date				Debit		Credit		Balance
Jan. 1		Balance						163,200
July 31		Purchase of equipment		71,400				234,600
Nov. 10		Cost of equipment sold				50,000		184,600
Accumulated Depreciation—Equipment
Date				Debit		Credit		Balance
Jan. 1		Balance						72,400
Nov. 10		Accumulated depreciation on equipment sold		30,600				41,800
Dec. 31		Depreciation for year				28,600		70,400
Retained Earnings
Date				Debit		Credit		Balance
Jan. 1		Balance						107,100
Aug. 23		Dividends (cash)		14,300				92,800
Dec. 31		Profit				78,500		171,300

From the postings in the accounts, indicate how the information is reported on a cash flow statement using the indirect method. The loss on disposal of equipment was $7,100 and the cash dividends were paid. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Cash Flow Statement
Cash flows from Operating activities
Net Income for the year	78500
Adjustment required
Depreciation expenss	28600
Loss on sale of equipment	7100
Net cash provided from Operating activities	114200
cash flows Investing activities
Purchase of equipment	-71400
Sale of equipment (50000-30600-7100)	12300
Net cash used in Investing activities		-59100
Cash flows from Financing activities
Cash dividend paid		-14300
Net cash used in Financing activities	-14300
Net increase in cash			40800