Q14-6SE
Question
Question: Computing cash flows from investing and financing activities Use the data in Short Exercise S14-5 to complete this exercise. Prepare Winding Road Cellular’s statement of cash flows using the indirect method for the year ended April 30, 2018. Assume beginning and ending Cash are \(48,000 and \)52,200, respectively.
Step-by-Step Solution
VerifiedAnswer
Net Increase/(Decrease) in cash is $4,200.
Cash flows from operating activities |
|
|
Net Income |
| $55,000 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
|
|
Depreciation expense | $2,000 |
|
Increase in current assets other than cash | ($27,000) |
|
Decrease in current liabilities | ($20,000) |
|
Net cash provided by operating activities |
| $10,000 |
Winding Road Cellular Statement of cash flows Year ended 31st December, 2018 | ||
Cash flows from operating activities |
|
|
Net Income |
| $55,000 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
|
|
Depreciation expense | $2,000 |
|
Increase in current assets other than cash | ($27,000) |
|
Decrease in current liabilities | ($20,000) |
|
Net cash provided by operating activities |
| $10,000 |
|
|
|
Cash flows from investing activities |
|
|
Cash receipt from sale of land | $27,000 |
|
Cash purchase of equipment | ($44,000) |
|
Net cash used for investing activities |
| ($17,000) |
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|
|
Cash flows from financing activities |
|
|
Cash receipt from issuance of common stock | $17,000 |
|
Cash payment of dividends | ($5,800) |
|
Net cash provided by financing activities |
| $11,200 |
Net Increase/(Decrease) in cash |
| $4,200 |
Cash balance, December 31, 2017 |
| $48,000 |
Cash balance, December 31, 2018 |
| $52,200 |