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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Statement of Cash Flows A list of Fischer Company’s cash flow activities is presented here:

  1. a. Patent amortization expense, $3,500
  2. b. Machinery was purchased for $39,500
  3. c. At year-end, bonds payable with a face value of $20,000 were issued for $17,000
  4. d. Net income, $47,200 k. Inventories increased by $15,400
  5. e. Dividends paid, $16,000
  6. f. Depreciation expense, $12,900
  7. g. Preferred stock was issued for $13,600
  8. h. Investments were acquired for $21,000
  9. i. Accounts receivable increased by $4,300
  10. j. Land was sold at cost, $11,000
  11. k. Inventories increased by $15,400
  12. l. Accounts payable increased by $2,700
  13. m. Beginning cash balance, $19,400

Required:

Prepare Fischer’s statement of cash flows.

To determine

Prepare the statement of cash flows for Company F.

Explanation

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period. Statement of cash flows includes the changes in cash balance due to operating, investing, and financing activities.

Prepare the statement of cash flows for Company F:

Company F
Statement of Cash Flows
For the Year Ended December 31, 2018
ParticularsAmount ($)Amount ($)
Cash flows from operating activities:  
Net income 47,200
Adjustments to reconcile net income to net cash flows from operating activities  
Depreciation expense12,900 
Patent amortization expense3,500 
Adjustments for the changes in working capital:  
Increase in accounts receivable(4,300) 
Increase in inventory(15,400) 
Increase in accounts payable

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