ndirect Method— Preparing a Statement of Cash Flows Kidman Corp. reported the following financial statements for the year ended December 31, 2020. Balance Sheet, December 31 2019 2020 Difference Cash and cash equivalents $14,400 $37,200 $22,800 Accounts receivable 11,400 9,000 (2,400) Merchandise inventory 18,600 35,400 16,800 Land 12,000 2,400 (9,600) Equipment 28,800 43,200 14,400 Accumulated depreciation (7,200) (14,400) (7,200) Total assets $78,000 $112,800 $34,800 Accounts payable $9,600 $10,800 $1,200 Notes payable, long-term 4,200 1,200 (3,000) Bonds payable -- 18,000 18,000 Common stock (no-par) 48,000 55,200 7,200 Retained earnings 16,200 27,600 11,400 Total liabilities and stockholders’ equity $78,000 $112,800 $34,800 Income Statement For Year Ended December 31, 2020 Revenues $91,200 Cost of goods sold 49,200 Depreciation 7,200 Other expenses 8,400 Loss on sale of land 6,000 Net income $20,400 Required Prepare the statement of cash flows for Kidman Corp. for the year ended December 31, 2020, using the indirect method. Statement of Cash Flows For the Year Ended December 31, 2020 Cash flows from operating activities Net income Answer Adjustments Depreciation expense Answer Loss on sale of land Answer Decrease in accounts receivable Answer Increase in merchandise inventory Answer Increase in accounts payable Answer Net cash provided by operating activities Answer Cash flows from investing activities Sale of land Answer Purchase of equipment Answer Net cash used by investing activities Answer Cash flows from financing activities Payment on long-term note issuance Answer Issuance of bond payable Answer Issuance of common stock Answer Cash paid for dividends Answer Net cash provided by financing activities Answer Net increase in cash and cash equivalents during 2020 Answer Cash and cash equivalents, January 1, 2020 Answer Cash and cash equivalents, December 31, 2020 Answer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

Indirect Method— Preparing a Statement of Cash Flows

Kidman Corp. reported the following financial statements for the year ended December 31, 2020.

Balance Sheet, December 31	2019	2020	Difference
Cash and cash equivalents	$14,400	$37,200	$22,800
Accounts receivable	11,400	9,000	(2,400)
Merchandise inventory	18,600	35,400	16,800
Land	12,000	2,400	(9,600)
Equipment	28,800	43,200	14,400
Accumulated depreciation	(7,200)	(14,400)	(7,200)
Total assets	$78,000	$112,800	$34,800
Accounts payable	$9,600	$10,800	$1,200
Notes payable, long-term	4,200	1,200	(3,000)
Bonds payable	--	18,000	18,000
Common stock (no-par)	48,000	55,200	7,200
Retained earnings	16,200	27,600	11,400
Total liabilities and stockholders’ equity	$78,000	$112,800	$34,800

Income Statement For Year Ended December 31, 2020
Revenues	$91,200
Cost of goods sold	49,200
Depreciation	7,200
Other expenses	8,400
Loss on sale of land	6,000
Net income	$20,400

Required

Prepare the statement of cash flows for Kidman Corp. for the year ended December 31, 2020, using the indirect method.

Statement of Cash Flows
For the Year Ended December 31, 2020
Cash flows from operating activities
Net income	Answer
Adjustments
Depreciation expense	Answer
Loss on sale of land	Answer
Decrease in accounts receivable	Answer
Increase in merchandise inventory	Answer
Increase in accounts payable	Answer
Net cash provided by operating activities	Answer
Cash flows from investing activities
Sale of land	Answer
Purchase of equipment	Answer
Net cash used by investing activities	Answer
Cash flows from financing activities
Payment on long-term note issuance	Answer
Issuance of bond payable	Answer
Issuance of common stock	Answer
Cash paid for dividends	Answer
Net cash provided by financing activities	Answer
Net increase in cash and cash equivalents during 2020	Answer
Cash and cash equivalents, January 1, 2020	Answer
Cash and cash equivalents, December 31, 2020	Answer

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