Yoric Company listed the net changes in its balance sheet accounts for the past year as follows:
|Debits > Credits by:||Credits > Debits by:|
|Long-term loans to subsidiaries||82,000|
|Plant and equipment||333,000|
|Income taxes payable||9,300|
The following additional information is available about last year's activities:
a. Net income for the year was $ ? .
b. The company sold equipment during the year for $35,600. The equipment originally cost $160,100 and it had $125,700 in accumulated depreciation at the time of sale.
c. Cash dividends of $10,700 were declared and paid during the year.
d. The beginning and ending balances in the Plant and Equipment and Accumulated Depreciation accounts are given below:
|Plant and equipment||$2,862,000||$3,195,000|
e.The balance in the Cash account at the beginning of the year was $109,700; the balance at the end of the year was $ ? .
f. If data are not given explaining the change in an account, make the most reasonable assumption as to the cause of the change.
Using the indirect method, prepare a statement of cash flows for the year.
Statement of Cash Flow:
The statement of cash flow is a key financial report which reconciles the changes in cash accounts over two periods. The statement utilized the last two balance sheets and the most current income statement.
Answer and Explanation:
Operating activities begin the statement of cash flow by reporting the net change in income for the period and adds back the non-cash expenses such as depreciation and amortization to determine cash income or loss for the period. The section then accounts for changes in working capital accounts from the balance sheet to determine the cash flow generated or used from operations. Cash generated or used from investing activities is calculated by accounting for changes in non-current assets. Cash generated or used from financing activities accounts for change in short and long term bank debt in addition to changes in non-current liabilities and equity sections of the balance sheet. The statement finalizes reporting by combining the changes from the three sections with beginning cash to determine ending cash.
Statement of Cash Flow
For the fiscal year ending December 31
|Cash flows from operating activities|
|Working capital changes:|
|(Increase) / Decrease in trade and other receivables||-170,200|
|(Increase) / Decrease in inventories||63,100|
|(Increase) / Decrease in Prepaid Expenses||-4,500|
|Increase / (Decrease) in trade payables||49,200|
|Increase / (Decrease) in Accrued Payable||-5,300|
|Increase / (Decrease) in Income Tax Payable||9,300|
|Net cash generated (used) from operating activities||87,200|
|Cash flows from investing activities|
|Sale (Purchase) of Plant & Equipment||-437,600|
|Proceeds from the sale of assets||35,600|
|Sale (Acquisition) of portfolio investments||-92,000|
|(Increase) Decrease in Loan Receivable||82,000|
|Net cash generated (used) from investing activities||-412,000|
|Cash flows from financing activities|
|Proceeds (Repurchase) from the issue of share capital||203,100|
|Proceeds (payments) from Bond Payable||203,000|
|Net cash generated (used) from financing activities||395,400|
|Net increase in cash and cash equivalents||70,600|
|Cash and cash equivalents at beginning of period||109,700|
|Cash and cash equivalents at end of period||180,300|
Learn more about this topic:
from Accounting 101: Financial AccountingChapter 12 / Lesson 5