Question

A.The loss on the cash sale of equipment was $22,125 (details in b).

B. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash.
C. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term note payable for the balance.
D. Borrowed $5,700 cash by signing a short-term note payable.
E. Paid $58,625 cash to reduce the long-term notes payable.
F. Issued 4,200 shares of common stock for $20 cash per share.
G. Declared and paid cash dividends of $53,500.
Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Statement of cash flows for the year

Cash flow from Operating Activities

Loss on sale of equipment $22,125

Net Cash Provided by Operating Activities $22,125

Cash flow from Investing Activities

Proceeds from sale of equipment $28,625

Purchase of equipment ($64,000)

Net Cash used by investing activities ($35,375)

Cash flow from Financing Activities

Note Payable Issued $5,700

Repayment of Note Payable ($58,625)

Issue of Common Stock $84,000

Cash Dividends Paid ($53,500)

Net Cash used by Financing activities ($22,425)

Step-by-step explanation:

Statement of cash flows for the year shows results of cash resulting from the following activities :

1. Cash flow from Operating Activities
2. Cash flow from Investing Activities
3. Cash flow from Financing Activities