Statement of Cash Flows—Indirect Method The comparative balance sheet of Livers Inc. for December 31, 20Y3 and...

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Accounting

Statement of Cash Flows—Indirect Method
The comparative balance sheet of Livers Inc. for December 31,20Y3 and 20Y2, is shown as follows:
Dec. 31, 20Y3 Dec. 31, 20Y2
Assets
Cash $301,740 $281,660
Accounts receivable (net) 109,310 101,160
Inventories 308,580 299,510
Investments 0 116,040
Land 158,270 0
Equipment 340,460 264,800
Accumulated depreciation—equipment (79,710) (71,410)
Total assets $1,138,650 $991,760
Liabilities and Stockholders'Equity
Accounts payable (merchandise creditors) $206,100 $195,380
Accrued expenses payable (operating expenses) 20,500 25,790
Dividends payable 11,390 8,930
Common stock, $10 par 61,490 48,600
Paid-in capital: Excess of issue price overpar-common stock 231,150 134,880
Retained earnings 608,020 578,180
Total liabilities and stockholders’ equity $1,138,650 $991,760
Additional data obtained from an examination of the accounts inthe ledger for 20Y3 are as follows:
The investments were sold for $135,770 cash.
Equipment and land were acquired for cash.
There were no disposals of equipment during the year.
The common stock was issued for cash.
There was a $76,450 credit to Retained Earnings for netincome.
There was a $46,610 debit to Retained Earnings for cashdividends declared.
Required:
Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Use the minus signto indicate cash out flows, cash payments, decreases in cash, orany negative adjustments.
Livers Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y3
Cash flows from operating activities:
$
Adjustments to reconcile net income to net cash flow fromoperating activities:
Changes in current operating assets and liabilities:
Net cash flow from operating activities $
Cash flows from investing activities:
$
Net cash flow used for investing activities
Cash flows from financing activities:
$
Net cash flow from financing activities
$
Cash at the beginning of the year
Cash at the end of the year $

Answer & Explanation Solved by verified expert

4.1 Ratings (723 Votes)

Cash Flow Statement (indirect):
	Amount $
Cash from Operating Activities:

Net Income	76450
Add:Depreciation	8300
Less:Income on Investment sale	-19730	135770-116040
less: Inc. in AR	-8150	109310-101160
less: Inc. in Inv.	-9070	308580-299510
add: Inc. in AP	10720	206100-195380
less: Dec. in Acc Exp.	-5290	20500-25790
add: Inc. in DP	2460	11390-8930
Cash Inflow of Operating Activities	55690

Cash from Investing Activities:

Add: Sale in Investment	135770
Less:Purch. Of equip	-75660	340460-264800
Less:Purch. Of land	-158270
Cash outflow of Investing Activities	-98160

Cash from Financing Activities:

Add:issue of CS	12890
Add: Additional capital received	96270
Less:Dividend paid	-46610
Cash inflow of Financing Activities	62550

Net Cash inflow of all activities	20080
Add: Opening Cash	281660
Closing Cash	301740

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Transcribed Image Text

Statement of Cash Flows—Indirect MethodThe comparative balance sheet of Livers Inc. for December 31,20Y3 and 20Y2, is shown as follows:Dec. 31, 20Y3Dec. 31, 20Y2AssetsCash$301,740$281,660Accounts receivable (net)109,310101,160Inventories308,580299,510Investments0116,040Land158,2700Equipment340,460264,800Accumulated depreciation—equipment(79,710)(71,410)Total assets$1,138,650$991,760Liabilities and Stockholders'EquityAccounts payable (merchandise creditors)$206,100$195,380Accrued expenses payable (operating expenses)20,50025,790Dividends payable11,3908,930Common stock, $10 par61,49048,600Paid-in capital: Excess of issue price overpar-common stock231,150134,880Retained earnings608,020578,180Total liabilities and stockholders’ equity$1,138,650$991,760Additional data obtained from an examination of the accounts inthe ledger for 20Y3 are as follows:The investments were sold for $135,770 cash.Equipment and land were acquired for cash.There were no disposals of equipment during the year.The common stock was issued for cash.There was a $76,450 credit to Retained Earnings for netincome.There was a $46,610 debit to Retained Earnings for cashdividends declared.Required:Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Use the minus signto indicate cash out flows, cash payments, decreases in cash, orany negative adjustments.Livers Inc.Statement of Cash FlowsFor the Year Ended December 31, 20Y3Cash flows from operating activities:$Adjustments to reconcile net income to net cash flow fromoperating activities:Changes in current operating assets and liabilities:Net cash flow from operating activities$Cash flows from investing activities:$Net cash flow used for investing activitiesCash flows from financing activities:$Net cash flow from financing activities$Cash at the beginning of the yearCash at the end of the year$

		Dec. 31, 20Y3	Dec. 31, 20Y2
Assets
Cash		$301,740	$281,660
Accounts receivable (net)		109,310	101,160
Inventories		308,580	299,510
Investments		0	116,040
Land		158,270	0
Equipment		340,460	264,800
Accumulated depreciation—equipment		(79,710)	(71,410)
	Total assets	$1,138,650	$991,760

Liabilities and Stockholders'Equity
Accounts payable (merchandise creditors)		$206,100	$195,380
Accrued expenses payable (operating expenses)		20,500	25,790
Dividends payable		11,390	8,930
Common stock, $10 par		61,490	48,600
Paid-in capital: Excess of issue price overpar-common stock		231,150	134,880
Retained earnings		608,020	578,180
	Total liabilities and stockholders’ equity	$1,138,650	$991,760

Livers Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y3
Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow fromoperating activities:


Changes in current operating assets and liabilities:




Net cash flow from operating activities		$
Cash flows from investing activities:
	$


Net cash flow used for investing activities
Cash flows from financing activities:
	$

Net cash flow from financing activities
		$
Cash at the beginning of the year
Cash at the end of the year		$