Question

Additional information:During the year, $80 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

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Statement of cash flow - Pharaoh Company

Cash Flows From Operating Activities

Net Income $780

Adjustment

Depreciation Expenses $130

Gain On Sale Of Investment -$70

Increase In Receivable -$470

Decrease In Inventories $240

Increase In Accounts Payable $280

Decrease In Accrued Liabilities -$70

$40

Net Cash From Operating Activities $820

Cash Flows From Investing Activities

Sale Of Long Term Investment $190

(1400-1280)+70

Purchase Of Plant Assets -$190 $0

Net Cash Used Investing Activities $0

Cash Flows From Financing Activities

Repayment Of Bonds Payable -$140

Issue Of Common Stock $210

Payment Of Dividends -$260

Net Cash From Financing Activities -$190

Net Increase In Cash And Cash Equivalents $630

Beginning Cash Balance $1,130

Ending Balance $1,760