Spreadsheet and Statement The following 2019 information is available for Stewart Company:

Partial additional information:

• The equipment that was sold for cash had cost $400 and had a book value of $300.
• Land that was sold brought a cash price of $530.
• Fifty shares of stock were issued at par.

(Appendix 21.1) Operating Cash Flows Spreadsheet Method Refer to the information for Stewart Company in E21-11.

Required:

Raised only on the information presented and using the direct method, prepare the cash flows from operating activities section of the 2019 statement of cash flows for Stewart using the spreadsheet method.

Prepare operating activities section in the cash flow statement under direct method of S Company for the year 2019.

Prepare operating activities section in the cash flow statement under direct method:

Table (1)

Table (2)

Working Note:

(a) Net income for the year ended 2019 is $1,140.

(b) Calculate the decrease in accounts receivable.

Decrease in accounts receivable = (opening accounts receivable – closing accounts receivable) = $450- $310=$140

(c) Calculate an increase in inventory.

Increase in inventory = Closing inventory - opening inventory=$450-$310=$50

(d) Calculate the cost of land sold.

Cost of land sold = (Proceeds from sale of land - Gain on sale of land)=$530−$400=$130

(e) Calculate the purchase of land.

Step 1: Calculate the balance amount of land after sale.

Balance amount of land after sales)={Opening balance−Sale of land}=$300−$130=$170

Step 2: Calculate the purchase of land.

Purchase of land = (Closing balance−Balance amount of land after sale)=$500−$170=$330

(f) Calculate the Proceeds from Equipment.

Proceeds from sale of equipment = Book value −Selling cost=$300−$260=$40

(g) Calculate the Purchase of equipment.

Step 1: Calculate the balance amount of equipment after sales.

Balance amount of equipment after sales)={Opening balance−Sale of equipment}=$1,600−$400=$1,200

Step 2: Calculate the purchase of equipment.

Purchase of Equipment = (Closing balance−Balance amount of equipment after sale)=$1,800−$1,200=$600

(h) Calculate the Depreciation expense.

Depreciation Expenses = (Opening accumulated depreciation− Closing accumulated depreciation)=$200−$150=$50 

(i) Calculate an increase in accounts payable.

Increase in accounts payable = (Closing balance of accounts payable−Opening balance of accounts payable)=$750−$600=$150

(j) Calculate the proceeds from issuance of common stock.

Proceeds from issuance of common stock = Number of share×Value of share=50×$10=$500

(k) Calculate the payment of dividend