Question

Condensed financial data of Cheng Inc. follow.

CHENG INC. Comparative Balance Sheets December 31
Assets		2020			2019
Cash		$100,100			$47,600
Accounts receivable		92,800			33,700
Inventory		111,500			101,700
Prepaid expenses		29,400			25,700
Investments		140,200			114,100
Equipment		264,000			241,200
Accumulated depreciation-equipment		(47,500	)		(52,100	)
Total		$690,500			$511,900
Liabilities and Stockholders’ Equity
Accounts payable		$111,200			$67,000
Accrued expenses payable		16,500			17,000
Bonds payable		114,400			149,800
Common stock		219,100			174,000
Retained earnings		229,300			104,100
Total		$690,500			$511,900

CHENG INC. Income Statement For the Year Ended December 31, 2020
Sales revenue				$391,400
Less:
Cost of goods sold		$135,700
Operating expenses, excluding depreciation		11,100
Depreciation expense		32,300
Income tax expense		27,600
Interest expense		4,500
Loss on disposal of plant assets		7,500		218,700
Net income				$172,700

Additional information:

1.		New equipment costing $79,700 was purchased for cash during the year.
2.		Old equipment having an original cost of $56,900 was sold for $12,500 cash.
3.		Bonds matured and were paid off at face value for cash.
4.		A cash dividend of $47,500 was declared and paid during the year.

Prepare a statement of cash flows using the indirect method.

Answer 1

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Cash Flow Statements
Cash Flow from operating activities
Net Income		$   172,700
Adjustment:
Deprciation Expense		$     32,300
Loss on disposal of plant		$        7,500
Changes in Current assets and Liabilities
Increase in accounts recievable		$    -59,100
Increase in Inventory		$      -9,800
Increase in prepaid expense		$      -3,700
Increase in Accounts Payable		$     44,200
Decrease in accrued expense		$          -500
Net Cash Flow from operating activities		$   183,600
Cash Flor from investing activities
Purchase of equipment		$    -79,700
Purchase of Investment	$140,200-$114,100	$    -26,100
Proceeds from sale of equipment		$     12,500
Net Cash flow for investing activities		$    -93,300
Cash Flow from financing activities
Issuance of common stock		$     45,100
Retirement of Bond		$    -35,400
Payment of dvidends		$    -47,500
Net Cash flow for financing activities		$    -37,800
Net Increase in Cash		$     52,500
Beginning Cash Balance		$     47,600
Ending Cash Balance		$   100,100