Method) Use the following information regarding the Newcastle Corporation to prepare a statement of cash flows using the indirect method: Accounts payable decrease $5,000 Accounts receivable increase 7,000 Wages payable decrease 3,000 Amortization expense 16,000 Cash balance. January 1 30,000 Cash balance, December 31 7,000 Cash paid as dividends 6,000 Cash paid to purchase land Cash paid to retire bonds payable at par 100,000 75,000 Cash received from issuance of common stock 45.000 Cash received from sale of equipment 12,000 Depreciation expense Gain on sale of equipment 39,000 14,000 Inventory increase 13,000 Net income 96,000 Prepaid expenses increase 8,000 Remember to use negative signs with answers when appropriate. NEWCASTLE CORPORATION Statement of Cash Flows For Year Ended December 31 Cash Flow from Operating Activities Net Income Add (deduct) items to convert net income to cash basis Depreciation Amortization Gain on Sale of Equipment Accounts Receivable Increase Inventory Increase Prepaid Expenses Increase Accounts Payable Decrease Wages Payable Decrease Cash Flow Provided by Operating Activities Cash Flow from Investing Activities Sale of Equipment 0. Purchase of Land Cash Used by Investing Activities

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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How do I prepare a statement of cash flow's using the indirect method? 

Statement of Cash Flows (Indirect Method)
Use the following information regarding the Newcastle Corporation to prepare a statement of cash flows using the indirect method:
Accounts payable decrease
$5,000
Accounts receivable increase
7,000
Wages payable decrease
3,000
Amortization expense
16,000
Cash balance, January 1
30,000
Cash balance, December 31
7,000
Cash paid as dividends
6,000
Cash paid to purchase land
Cash paid to retire bonds payable at par
100,000
75,000
Cash received from issuance of common stock 45,000
Cash received from sale of equipment
12,000
Depreciation expense
Gain on sale of equipment
39,000
14,000
Inventory increase
13,000
Net income
96,000
Prepaid expenses increase
8,000
Remember to use negative signs with answers when appropriate.
NEWCASTLE CORPORATION
Statement of Cash Flows
For Year Ended December 31
Cash Flow from Operating Activities
Net Income
24
Add (deduct) items to convert net income to cash basis
Depreciation
Amortization
Gain on Sale of Equipment
Accounts Receivable Increase
Inventory Increase
Prepaid Expenses Increase
Accounts Payable Decrease
Wages Payable Decrease
Cash Flow Provided by Operating Activities
Cash Flow from Investing Activities
Sale of Equipment
0.
Purchase of Land
0.
Cash Used by Investing Activities
O O O OOOO
Transcribed Image Text:Statement of Cash Flows (Indirect Method) Use the following information regarding the Newcastle Corporation to prepare a statement of cash flows using the indirect method: Accounts payable decrease $5,000 Accounts receivable increase 7,000 Wages payable decrease 3,000 Amortization expense 16,000 Cash balance, January 1 30,000 Cash balance, December 31 7,000 Cash paid as dividends 6,000 Cash paid to purchase land Cash paid to retire bonds payable at par 100,000 75,000 Cash received from issuance of common stock 45,000 Cash received from sale of equipment 12,000 Depreciation expense Gain on sale of equipment 39,000 14,000 Inventory increase 13,000 Net income 96,000 Prepaid expenses increase 8,000 Remember to use negative signs with answers when appropriate. NEWCASTLE CORPORATION Statement of Cash Flows For Year Ended December 31 Cash Flow from Operating Activities Net Income 24 Add (deduct) items to convert net income to cash basis Depreciation Amortization Gain on Sale of Equipment Accounts Receivable Increase Inventory Increase Prepaid Expenses Increase Accounts Payable Decrease Wages Payable Decrease Cash Flow Provided by Operating Activities Cash Flow from Investing Activities Sale of Equipment 0. Purchase of Land 0. Cash Used by Investing Activities O O O OOOO
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