Question

3. Below is financial information extracted from financial statements for KHLED Inc. for 2016.

items	Amounts in thousands of Saudi Riyal
Net in come	200
Depreciation expense	15
Increase in accounts receivable	35
Decrease in inventory	30
Increase in accounts payable	20
Proceeds from sale of land	50
Purchases of equipment	20
Proceeds from issuance of common stock	40
Cash dividends	5
Cash, January 1, 2016	100

Required: Prepare cash flow statement for KHALED Inc. for 2016 using indirect method.

i don't want the answer in a picture

Answer 1

Solution:

KHLED Inc. Statement of cash flow For the year ended December 31,2016
A. CASH FLOW FROM OPERATING ACTIVITY
Net in come		200
Adjustments to reconcile net income
Add: Depreciation expense	15
Add: Decrease in inventory	30
Add: Increase in accounts payable	20
Less: Increase in accounts receivable	(35)	30
Net cash provided by operating activity		230
B. CASH FLOW FROM INVESTING ACTIVITY
Proceeds from sale of land	50
Purchases of equipment (Outflow)	(20)
Net cash provided by investing activity		30
C. CASH FLOW FROM FINANCING ACTIVITY
Proceeds from issuance of common stock	40
Cash dividends (Outflow)	(5)
Net cash provided by financing activity		35
Net Increase in cash (A +B+C)		295
Add: Cash, January 1, 2016		100
Cash, December 31, 2016		395