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Harlan Mining Co. has recently decided to go public and has hired you as an independent...

Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows.    Financial statements of Harlan Mining Co. for 2019 and 2018 are provided below.           BALANCE SHEETS                                      
               12/31/2019       12/31/2018              
Cash               $408,000        $192,000               
Accounts receivable               360,000       216,000              
Inventory               384,000       480,000              
Property, plant and equipment           $608,000        $960,000                   
Less accumulated depreciation           -320,000   288,000   -304,000   656,000              
               $1,440,000        $1,544,000               
                                      
Accounts payable               $176,000        $96,000               
Income taxes payable               352,000       392,000              
Bonds payable               360,000       600,000              
Common stock               216,000       216,000              
Retained earnings               336,000       240,000              
               $1,440,000        $1,544,000               
                                      
INCOME STATEMENT                                      
For the Year Ended December 31, 2019                                      
Sales revenue       $8,400,000                               
Cost of sales       7,152,000                              
Gross profit       1,248,000                              
Selling expenses   $600,000                                   
Administrative expenses   192,000   792,000                              
Income from operations       456,000                              
Other losses       72,000                              
Income before taxes       384,000                              
Income taxes       96,000                              
Net income       $288,000                               
The following additional data were provided:                                      
   1   Dividends for the year 2019 were $192,000.                           2   During the year, equipment was sold for $240,000. This equipment cost $352,000 originally and had a book value of $288,000 at the time of sale.                        3   Depreciation expense, $80,000, is in the selling expense category.           Questions relate to a statement of cash flows (indirect method) for the year ended December 31st, 2019, for Harlan Mining Company.                                                      
Calculate net cash provided by operating activities using EITHER the direct method OR the indirect method.                              

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Answer #1

Statement of cash flow

Cash flow from operating activities
Net income 288000
Adjustment to reconcile net income to net cash flow from operating activities
Deprecaition expense 80000
Loss on sale of equipment (288000-240000) 48000
Increase account receivable -144000
Decrease inventory 96000
Increase account payable 80000
Decrease income tax payable -40000
120000
Net cash flow from operating activities 408000
Cash flow from investing activities
Sale of equipment 240000
Net cash flow from investing activities 240000
Cash flow from financing activities
Repaid bond payable -240000
Dividend paid -192000
Net cash flow from financing activities -432000
Net cash flow 216000
Beginning cash 192000
Ending cash 408000
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