Question

The following information is available for Sweet Acacia Industries for the year ended December 31, 2022. $38,400 Beginning cash balance Accounts payable increase 9,120 Depreciation expense 65,600 Accounts receivable decrease 7,680 Inventory decrease 4,960 Net income 91,520 Cash received for sale of land at book value 166,400 Cash dividends paid 60,800 Income taxes payable decrease 6,240 129,600 Cash used to purchase land 105,600 Cash used to redeem bonds 256,000 Cash received from issuing stock

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 eg. (15,000).)

Answer 1

Sweet Acacia Industries

Statement of Cash Flows

For the Year Ended December 31, 2022

Cash Flows from Operating Activities:

Net income $91520

Adjustments to reconcile net income to

Net cash provided by operating activities

Depreciation expense 65600

Decrease in Accounts Receivable 7680

Decrease in inventory 4960

Increase in accounts payable 9120

Decrease in Income tax payable -6240 $81120

Net cash provided by operating activities $172,640

Cash Flows from Investing Activities:

Sale of Land 166400

Purchase of Land -129600

Net Cash Provided by Investing Activities $36,800

Cash Flows from Financing Activities:

Payment of Dividends -60800

Issuance of Stock 256000

Redemption of Bonds -105600

Net Cash provided by Financing Activities $89,600

Net Increase in Cash $299,040

Cash at Beginning of Period $38,400

Cash at End of Period $337,440