If anyone could please answer this using the Indirect Method of Cash Flows. I really just need a better understanding of it so if you could show why you put a certain number it would be great. Thank You!
Changes in account balances for Dumpster Fire, Inc. during 2016 were as follows:
Decrease in Accounts Payable 15,000
Increase in Accounts Receivable 22,000
Decrease in Accumulated Depreciation 7,000
Increase in Common Stock 75,000
Decrease in Copyright 12,000
Increase in Dividends Payable 8,000
Increase in Equipment 11,000
Decrease in Interest Payable 2,000
Increase in Inventory 4,000
Increase in Long-Term Notes Payable 10,000
Decrease in Prepaid Insurance 1,000
Decrease in Retained Earnings 20,000
Decrease in Short-term investments 3,000
Increase in Supplies 6,000
Other Info: Equipment with an original cost of $25,000 and a net book value of $7,000 was sold at a $3,000 loss. The company negotiated converting an account payable into a longer duration obligation. They previously had no longer duration obligations, and entered into no other longer duration obligations during the year. Dividends of $15,000 were declared. No intangible assets were purchased or sold. Short term investments were sold at a $1,000 loss. Please calculate cash flow from operations, cash flow from investing activity, and cash flow from financing activity.
Statement of Cash Flows | ||
Cash Flow from Operations | ||
Decrease in Accounts payable | -$15,000.00 | |
Increase in Accounts Receivable | -$22,000.00 | |
Increase in Dividends payable | $8,000.00 | |
Decrease in Interest payable | -$2,000.00 | |
Increase in inventory | -$4,000.00 | |
Decrease in prepaid insurance | $1,000.00 | |
Loss on sale of investments | $1,000.00 | |
Loss on sale of equipment | $3,000.00 | |
Decrease in Accumulated Depreciation | -$7,000.00 | -$37,000.00 |
Investing Activity | ||
Decrease in copywright | $12,000.00 | |
Increase in equipment | -$11,000.00 | |
Decrease in short term investments | $3,000.00 | |
Decrease in equipment | $4,000.00 | $8,000.00 |
Financing Activity | ||
Increase in common stcok | $75,000.00 | |
Increase in long term notes payable | $10,000.00 | $85,000.00 |
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