Statement of Cash Flows—Indirect Method
The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:
|Dec. 31, 20Y2||Dec. 31, 20Y1|
|Accounts receivable (net)||65||47|
|Liabilities and Stockholders' Equity|
|Accounts payable (merchandise creditors)||$45||$37|
|Common stock, $1 par||23||12|
|Paid-in capital: Excess of issue price over par—common stock||56||29|
|Total liabilities and stockholders' equity||$354||$248|
The following additional information is taken from the records:
Land was sold for $25.
Equipment was acquired for cash.
There were no disposals of equipment during the year.
The common stock was issued for cash.
There was a $76 credit to Retained Earnings for net income.
There was a $23 debit to Retained Earnings for cash dividends declared
a. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
|Olson-Jones Industries Inc.|
|Statement of Cash Flows|
|For the Year Ended December 31, 20Y2|
|Cash flows from operating activities:|
|Adjustments to reconcile net income to net cash flow from operating activities:|
|Gain on sale of land|
|Changes in current operating assets and liabilities:|
|Increase in accounts receivable|
|Increase in inventories|
|Increase in accounts payable|
|Net cash flow from operating activities||$|
|Cash flows from (used for) investing activities:|
|Cash from sale of land||$|
|Cash used for purchase of equipment|
|Net cash flow from investing activities|
|Cash flows from (used for) financing activities:|
|Cash from sale of common stock||$|
|Cash used for dividends|
|Net cash flow from financing activities|
|Increase in cash||$|
|Cash at the beginning of the year|
|Cash at the end of the year|
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