Statement of Cash Flows—Indirect Method
The comparative balance sheet of Yellow Dog Enterprises Inc. atDecember 31, 20Y8 and 20Y7, is as follows:
| Dec. 31, 20Y8 | Dec. 31, 20Y7 |
| Assets | | |
| Cash | $74,100 | | $90,800 | |
| Accounts receivable (net) | 113,860 | | 122,410 | |
| Merchandise inventory | 162,630 | | 151,730 | |
| Prepaid expenses | 6,630 | | 4,600 | |
| Equipment | 331,330 | | 271,830 | |
| Accumulated depreciation-equipment | (86,140) | | (66,670) | |
| Total assets | $602,410 | | $574,700 | |
| | |
| Liabilities and Stockholders'Equity | | |
| Accounts payable (merchandise creditors) | $126,510 | | $120,110 | |
| Mortgage note payable | 0 | | 172,410 | |
| Common stock, $1 par | 19,000 | | 12,000 | |
| Paid-in capital: Excess of issue price overpar-common stock | 295,000 | | 162,000 | |
| Retained earnings | 161,900 | | 108,180 | |
| Total liabilities and stockholders’ equity | $602,410 | | $574,700 | |
Additional data obtained from the income statement and from anexamination of the accounts in the ledger for 20Y8 are asfollows:
- Net income, $137,520.
- Depreciation reported on the income statement, $42,030.
- Equipment was purchased at a cost of $82,060, and fullydepreciated equipment costing $22,560 was discarded, with nosalvage realized.
- The mortgage note payable was not due for six years, but theterms permitted earlier payment without penalty.
- 7,000 shares of common stock were issued at $20 for cash.
- Cash dividends declared and paid, $83,800.
Required:
Prepare a statement of cash flows, using the indirect method.Use the minus sign to indicate cash outflows, cash payments,decreases in cash, or any negative adjustments.
| Yellow Dog Enterprises Inc. |
| Statement of Cash Flows |
| For the Year Ended December 31, 20Y8 |
| 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 (used for) investing activities: | | |
| $ | |
| Net cash flow used for investing activities | | |
| Cash flows from (used for) financing activities: | | |
| $ | |
| | |
| | |
| Net cash flow used for financing activities | | |
| | $ |
| Cash at the beginning of the year | | |
| Cash at the end of the year | | $ |
