Problem 11-2A Classify items and prepare the statement of cash flows (LO11-1, 11-3, 11-4, 11-5)Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in preparing the statement of cash flows(indirect method) for ATM Software Developers. All amounts are in thousands (000s).ATM SOFTWARE DEVELOPERSStatement of Cash FlowsFor the year ended December 31, 2021Cash Flows from Operating ActivitiesNet incomeAdjustments to reconcile net income to net cash flows from operatingactivities:Net cash flows from operating activitiesCash Flows from Investing ActivitiesNet cash flows from investing activitiesCash Flows from Financing ActivitiesNet cash flows from financing activitiesNet increase (decrease) in cashCash at the beginning of the period$1,9657,985Cash at the end of the period$ 9,950Listed below in random order are line items to be Included in the statement of cash flows.$ 8,50012,7005,3903,9401,68516,12039,4901,400Cash received from the sale of land (no gain or loss)Issuance of common stockDepreciation expenseIncrease in accounts receivableDecrease in accounts payableIssuance of long-term notes payablePurchase of equipmentDecrease in inventoryDecrease in prepaid rentPayment of dividendsNet incomePurchase of treasury stock8306,22010,9002,540 Requlred:Prepare the statement of cash flows for ATM Software Developers using the indirect method. (List cash outflows and any decrease Incash as negative amounts. Enter your answers In thousands (I.e., 10,000,000 should be entered as 10,000).)ATM SOFTWARE DEVELOPERSStatement of Cash FlowsFor the Year Ended December 31, 2021Cash Flows from Operating ActivitiesAdjustments to reconcile net income to net cash flows from operating activitiesNet cash flows from operating activitiesCash Flows from Investing ActivitiesNet cash flows from investing activitiesCash Flows from Financing ActivitiesNet cash flows from financing activitiesCash at the beginning of the periodCash at the end of the period

Solution: Statement of cash flows are as under:

Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in preparing the statement of cash flows (indirect method) for ATM Software Developers. All amounts are in thousands (000s). ATM SOFTWARE DEVELOPERS Statement of Cash Flows For the year ended December 31, 2021 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities Cash Flows from Investing Activities Net cash flows from investing activities Cash Flows from Financing Activities Net cash flows from financing activities Net increase (decrease) in cash Cash at the beginning of the period $ 1,965 7,985 $ 9,950 Cash at the end of the period Listed below in random order are line items to be included in the statement of cash flows. Cash received from the sale of land (no gain or loss) Issuance of common stock $ 8,500 12,700 5,390 3,940 1,685 16,120 39,490 1,400 Depreciation expense Increase in accounts receivable Decrease in accounts payable Issuance of long-term notes payable Purchase of equipment Decrease in inventory Decrease in prepaid rent Payment of dividends Net income Purchase of treasury stock 830 6,220 10,900 2,540

Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in preparing the statement of cash flows (indirect method) for ATM Software Developers. All amounts are in thousands (000s). ATM SOFTWARE DEVELOPERS Statement of Cash Flows For the year ended December 31, 2021 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities Cash Flows from Investing Activities Net cash flows from investing activities Cash Flows from Financing Activities Net cash flows from financing activities Net increase (decrease) in cash Cash at the beginning of the period $ 1,965 7,985 $ 9,950 Cash at the end of the period Listed below in random order are line items to be included in the statement of cash flows. Cash received from the sale of land (no gain or loss) Issuance of common stock $ 8,500 12,700 5,390 3,940 1,685 16,120 39,490 1,400 Depreciation expense Increase in accounts receivable Decrease in accounts payable Issuance of long-term notes payable Purchase of equipment Decrease in inventory Decrease in prepaid rent Payment of dividends Net income Purchase of treasury stock 830 6,220 10,900 2,540

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 49E: Preparing a Statement of Cash Flows-Direct Method The controller of Newstrom Software Inc. provides...

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