Question

The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as...

The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $183 $14 Accounts receivable (net) 55 49 Inventories 117 99 Land 250 330 Equipment 205 175 Accumulated depreciation—equipment (68) (42) Total assets $742 $625 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $51 $37 Dividends payable 5 - Common stock, $1 par 125 80 Paid-in capital: Excess of issue price over par—common stock 85 70 Retained earnings 476 438 Total liabilities and stockholders' equity $742 $625 The following additional information is taken from the records: Land was sold for $120. Equipment was acquired for cash. There were no disposals of equipment during the year. The common stock was issued for cash. There was a $62 credit to Retained Earnings for net income. There was a $24 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.

Homework Answers

Answer #1
Statement of cash flow
cash from operating activities
net income for the year 62
Adjustments to reconcile net income
Depreciation expense 26
Gain on sale of land (120-80) -40
increase in accounts receivable -6
increase in inventory -18
increase in accounts payable 14
Net cash flow from operating activities 38
Cash from investing activities
cash from sale of land 120
Cash used to purchase Equipment -30
Cash flow from investing activities 90
Cash from financing activities
cash dividend -19
Cash from stock issue 60
Cash from financing activities 41
net increase in cash 169
cash at the beginning of the year 14
cash at year end 183
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