Useulate the cash flow from operating activities using the indirectmethod.AA. Statement of Cash Flows (Indirect Method) Use the following information regarding the SurpaCorporation to (a) prepare a statement of cash flows using the indirect method and (b) computeSurpa's operating-cash-flow -to-current-liabilities ratio.Accounts payable increase. .Accounts receivable increase. . .Accrued liabilities decrease . ..Amortization expense. .Cash balance, January 1.. .Cash balance, December 31..Cash paid as dividends ...Cash paid to purchase land . ..Cash paid to retire bonds payable at par. .Cash received from issuance of common stock...Cash received from sale of equipment . ..Depreciation expense. ..Gain on sale of equipment . . ..Inventory decrease. . .Net income. . ..am. . . $ 13,000..4,0006,0007,00021,00017,00031,00090,00060,00040,00017,00029,0007,00013,00078,0003,000140,000Prepaid expenses increase ...Average current liabilities. ..A. Cash FlowActivities (Indirect Method) The Azuza Company owns no plant as-

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Asked Nov 21, 2019
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Use
ulate the cash flow from operating activities using the indirect
method.
AA. Statement of Cash Flows (Indirect Method) Use the following information regarding the Surpa
Corporation to (a) prepare a statement of cash flows using the indirect method and (b) compute
Surpa's operating-cash-flow -to-current-liabilities ratio.
Accounts payable increase. .
Accounts receivable increase. . .
Accrued liabilities decrease . ..
Amortization expense. .
Cash balance, January 1.. .
Cash balance, December 31..
Cash paid as dividends ...
Cash paid to purchase land . ..
Cash paid to retire bonds payable at par. .
Cash received from issuance of common stock...
Cash received from sale of equipment . ..
Depreciation expense. ..
Gain on sale of equipment . . ..
Inventory decrease. . .
Net income. . ..
am
. . . $ 13,000
..
4,000
6,000
7,000
21,000
17,000
31,000
90,000
60,000
40,000
17,000
29,000
7,000
13,000
78,000
3,000
140,000
Prepaid expenses increase ...
Average current liabilities. ..
A. Cash Flow
Activities (Indirect Method) The Azuza Company owns no plant as-
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Use ulate the cash flow from operating activities using the indirect method. AA. Statement of Cash Flows (Indirect Method) Use the following information regarding the Surpa Corporation to (a) prepare a statement of cash flows using the indirect method and (b) compute Surpa's operating-cash-flow -to-current-liabilities ratio. Accounts payable increase. . Accounts receivable increase. . . Accrued liabilities decrease . .. Amortization expense. . Cash balance, January 1.. . Cash balance, December 31.. Cash paid as dividends ... Cash paid to purchase land . .. Cash paid to retire bonds payable at par. . Cash received from issuance of common stock... Cash received from sale of equipment . .. Depreciation expense. .. Gain on sale of equipment . . .. Inventory decrease. . . Net income. . .. am . . . $ 13,000 .. 4,000 6,000 7,000 21,000 17,000 31,000 90,000 60,000 40,000 17,000 29,000 7,000 13,000 78,000 3,000 140,000 Prepaid expenses increase ... Average current liabilities. .. A. Cash Flow Activities (Indirect Method) The Azuza Company owns no plant as-

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Expert Answer

Step 1

(a) Statement of cash flows is prepared as follows:

A
Surpa's Corporation
Statement of Cash Flows
1
For year ended December 31
Amount (S)
Particulars
Operating Activities:
4
5 Cash Flow from
78000
6 Net Income
Adjustments to reconcile net income to net cash
7 provided by operations:
8 Depreciation Expense
9 Amortization
10 Gain on sale of equipment
11 Accounts receivables increase
12 Inventory Decrease
13 Prepaid expenses increase
14 Accounts payable increase
15 Accrued liabilities decrease
29000
7000
-7000
-4000
13000
-3000
13000
-6000
-SUM(B6:B15)
16 Net Cash provided by operating activities
17 Cash Flow from Investing Activities:
18 Sale of equipment
19 Purchase of land
17000
-90000
-B18+B19
20 Net Cash used in Investing activities
21 Cash Flow from Financing Activities:
22 Issuance of common stock
23 Retirement of bond payable
24 Payment of dividends
25 Net Cash used by financing activities
40000
-60000
-31000
-SUM(B22 :B24)
-B16+ B20+B25
26 Net Decrease in Cash
27 Cash balance at beginning of year
28 Cash balance at end of year
21000
-B26+B27
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A Surpa's Corporation Statement of Cash Flows 1 For year ended December 31 Amount (S) Particulars Operating Activities: 4 5 Cash Flow from 78000 6 Net Income Adjustments to reconcile net income to net cash 7 provided by operations: 8 Depreciation Expense 9 Amortization 10 Gain on sale of equipment 11 Accounts receivables increase 12 Inventory Decrease 13 Prepaid expenses increase 14 Accounts payable increase 15 Accrued liabilities decrease 29000 7000 -7000 -4000 13000 -3000 13000 -6000 -SUM(B6:B15) 16 Net Cash provided by operating activities 17 Cash Flow from Investing Activities: 18 Sale of equipment 19 Purchase of land 17000 -90000 -B18+B19 20 Net Cash used in Investing activities 21 Cash Flow from Financing Activities: 22 Issuance of common stock 23 Retirement of bond payable 24 Payment of dividends 25 Net Cash used by financing activities 40000 -60000 -31000 -SUM(B22 :B24) -B16+ B20+B25 26 Net Decrease in Cash 27 Cash balance at beginning of year 28 Cash balance at end of year 21000 -B26+B27

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Step 2

Following table shows the results of formula...

A
Surpa's Corporation
Statement of Cash Flows
For year ended December 31
1
2
Amount (S)
Particulars
5 Cash Flow from Operating Activities:
4
78,000
6 Net Income
Adjustments to reconcile net income to net cash
7 provided by operations:
8 Depreciation Expense
9 Amortization
10 Gain on sale of equipment
11 Accounts receivables increase
12 Inventory Decrease
13 Prepaid expenses increase
14 Accounts payable increase
15 Accrued liabilities decrease
16 Net Cash provided by operating activities
17 Cash Flow from Investing Activities:
18 Sale of equipment
19 Purchase of land
20 Net Cash used in Investing activities
21 Cash Flow from Financing Activities:
22 Issuance of common stock
23 Retirement of bond payable
24 Payment of dividends
29,000
7.000
-7,000
-4,000
13.000
-3,000
13,000
-6,000
120000
17,000
-90.000
-73,000
40,000
-60,000
-31,000
-51,000
25 Net Cash used by financing activities
26 Net Decrease in Cash
27 Cash balance at beginning of year
28 Cash balance at end of year
-4,000
21000
17,000
help_outline

Image Transcriptionclose

A Surpa's Corporation Statement of Cash Flows For year ended December 31 1 2 Amount (S) Particulars 5 Cash Flow from Operating Activities: 4 78,000 6 Net Income Adjustments to reconcile net income to net cash 7 provided by operations: 8 Depreciation Expense 9 Amortization 10 Gain on sale of equipment 11 Accounts receivables increase 12 Inventory Decrease 13 Prepaid expenses increase 14 Accounts payable increase 15 Accrued liabilities decrease 16 Net Cash provided by operating activities 17 Cash Flow from Investing Activities: 18 Sale of equipment 19 Purchase of land 20 Net Cash used in Investing activities 21 Cash Flow from Financing Activities: 22 Issuance of common stock 23 Retirement of bond payable 24 Payment of dividends 29,000 7.000 -7,000 -4,000 13.000 -3,000 13,000 -6,000 120000 17,000 -90.000 -73,000 40,000 -60,000 -31,000 -51,000 25 Net Cash used by financing activities 26 Net Decrease in Cash 27 Cash balance at beginning of year 28 Cash balance at end of year -4,000 21000 17,000

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