Question

Statement of Cash Flows—Indirect Method The comparative balance sheet of Amelia Enterprises, Inc. at December 31, 2016 and 2015, is as follows:

Dec. 31, 2016                                     Dec. 31, 2015

Assets

Cash $86,160                                                $105,150

Accounts receivable (net)                                                             132,390                                                141,750

Merchandise inventory                                                                 189,130                                                 175,690

Prepaid expenses                                                                            7,710                                                     5,320

Equipment 385,280                                                 314,770

Accumulated depreciation-equipment (100,170)                                            (77,200)

Total $700,500                                             $665,480

Liabilities and Stockholders' Equity

Accounts payable (merchandise creditors)                                            $147,110                                              $139,090

Mortgage note payable 0                                            199,640

Common stock, $1 par 22,000                                                  14,000

Paid-in capital: Excess of issue price over par-common stock 340,000                                                188,000

Retained earnings 191,390                                               124,750

Total $700,500                                             $665,480

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2016 are as follows:

Net income, $170,600.

Depreciation reported on the income statement, $49,100.

Equipment was purchased at a cost of $96,640, and fully depreciated equipment costing $26,130 was discarded, with no salvage realized.

The mortgage note payable was not due until 2018, but the terms permitted earlier payment without penalty.

8,000 shares of common stock were issued at $20 for cash.

Cash dividends declared and paid, $103,960.

Answer 1

Cash flow Statement:
Cash flows from Operating activities:
Net Income for the year				170600
Adjustment required for reconciliation
Depreciation				49100
Decrease in Accounts receivable				9360
Increase in Inventory				-13440
Increase in Prepaid expense				-2390
Increase in Accounts payable				8020
Nnet cashh provided from operating activities					221250
Cash flows fom Investing activities
Equipment purchassed				-96640
Net cash used in Investing activities					-96640
Cash flows from Financing activities:
Mortgage lloan paid				-199640
issue of Common Stock				160000
Dividend paid				-103960
Net cash used n Financing activities					-143600
Net cash decrease					-18990
Beginning balance f cash					105150
Ending balance of cash					86160