Yoric Company listed the net changes in its balance sheet accounts for the past year as follows:...


Yoric Company listed the net changes in its balance sheet accounts for the past year as follows:

Debits > Credits by: Credits > Debits by:
Cash $70,600
Accounts receivable 170,200
Inventory 63,100
Prepaid expenses 4,500
Long-term loans to subsidiaries 82,000
Long-term investments 92,000
Plant and equipment 333,000
Accumulated depreciation 65,900
Accounts payable 49,200
Accrued liabilities 5,300
Income taxes payable 9,300
Bonds payable 203,000
Common stock 128,000
Retained earnings 75,100
$675,600 $675,600

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:

Beginning Ending
Plant and equipment $2,862,000 $3,195,000
Accumulated depreciation $990,000 $1,055,900

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.

Yoric Company

Statement of Cash Flow

For the fiscal year ending December 31

Cash flows from operating activities
Profit 85,800
Adjustments for:
Depreciation Expense 59,800
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
(Dividends) Injections -10,700
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:

Using the Statement of Cash Flows for Decision Making

from Accounting 101: Financial Accounting

Chapter 12 / Lesson 5

Related to this Question

Explore our homework questions and answers library