Q14-8SE
Question
Question: Preparing the statement of cash flows—indirect method Use the Preston Media Corporation data in Short Exercise S14-7 and the results you calculated from the requirements. Prepare Preston Media’s statement of cash flows— indirect method—for the year ended December 31, 2018.
Step-by-Step Solution
VerifiedAnswer
Net Increase/(Decrease) in cash is $1,100.
Cash flows from operating activities | Amount | Amount |
Net Income |
| $19,000 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
|
|
Depreciation expense | $11,000 |
|
Increase in accounts receivables | ($4,500) |
|
Increase in accounts payable | $3,500 |
|
Net cash provided by operating activities |
| $29,000 |
Winding Road Cellular Statement of cash flows Year ended 31st December, 2018 | ||
Cash flows from operating activities |
|
|
Net Income |
| $19,000 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
|
|
Depreciation expense | $11,000 |
|
Increase in accounts receivables | ($4,500) |
|
Increase in accounts payable | $3,500 |
|
Net cash provided by operating activities |
| $29,000 |
|
|
|
Cash flows from investing activities |
|
|
Cash purchase of plant assets | ($21,000) |
|
Net cash used for investing activities |
| ($21,000) |
|
|
|
Cash flows from financing activities |
|
|
Cash receipt from issuance of common stock | $4,000 |
|
Cash payment of dividends | ($7,900) |
|
Payment to notes payable | ($7,400) |
|
Cash receipt from issuance of note payable | $4,400 |
|
Net cash provided by financing activities |
| ($6,900) |
Net Increase/(Decrease) in cash |
| $1,100 |
Cash balance, December 31, 2017 |
| $3,900 |
Cash balance, December 31, 2018 |
| $5,000 |