Preparing a Simple Statement of Cash Flows Using the Indirect Method – Avalos Corporation is preparing its annual financial statements at December 31, 2011. Listed here are the items on its statement of cash flows presented in alphabetical order. Parentheses indicate that a listed amount should be subtracted on the cash flow statement. The beginning balance in cash was $25,000 and the ending balance was $50,000.
|
Cash borrowed on three-year note |
$30,000 |
|
Decrease in accounts payable |
3,000 |
|
Decrease in inventory |
1,000 |
|
Increase in accounts receivable |
9,000 |
|
Land purchased |
36,000 |
|
Net income |
25,000 |
|
New delivery truck purchased for cash |
7,000 |
|
Stock issued for cash |
24,000 |
Required:
Prepare the 2011 statement of cash flows for Avalos Corporation. The section reporting cash flows from operating activities should be prepared using the indirect method discussed in the chapter.