test question 283822

Aug 29, 2021 | Uncategorized

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Problem 16 9

The comparative balance sheet of Posner Company, for 2011 and the preceding year ended December 31, 2010, appears below in condensed form:

The income statement for the current year is as follows:

Additional data for the current year are as follows:

  1. Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $183,200.
  2. Bonds payable for $100,000 were retired by payment at their face amount.
  3. 5,000 shares of common stock were issued at $13 for cash.
  4. Cash dividends declared and paid, $25,000.

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Prepare a statement of cash flows, using the indirect method of reporting cash flows from operating activities.

Posner Company
Statement of Cash Flows
For the Year Ended December 31, 2011
Cash flows from operating activities:
  • Cash from sale of common stock
  • Cash from sale of investments
  • Cash paid to retire bonds payable
  • Net income, per income statement

Correct 5

$ Correct 6
  • Add: Cash from sale of common stock
  • Add: Depreciation
  • Add: Cash paid for dividends
  • Add: Cash paid to retire bonds payable

Correct 7

$ Correct 8
  • Cash paid for purchase of equipment
  • Cash paid for dividends
  • Decrease in accounts receivable
  • Cash paid to retire bonds payable

Correct 9

Correct 10
  • Cash from sale of common stock
  • Cash from sale of investments
  • Cash paid for dividends
  • Increase in accounts payable

Correct 11

Correct 12
Correct 13
$ Correct 14
  • Deduct: Cash from sale of investments
  • Deduct: Cash paid for dividends
  • Deduct: Increase in inventories
  • Deduct: Cash paid for purchase of equipment

Correct 15

$ Correct 16
  • Cash from sale of common stock
  • Cash from sale of investments
  • Gain on sale of investments
  • Cash paid for purchase of equipment

Correct 17

Correct 18
Correct 19
Net cash flow from operating activities
Correct 21
Cash flows from investing activities:
  • Depreciation
  • Cash from sale of investments
  • Increase in inventories
  • Gain on sale of investments
  • Net income, per income statement

Correct 23

$ Correct 24
  • Cash from sale of common stock
  • Gain on sale of investments
  • Increase in accounts payable
  • Less: Cash paid for purchase of equipment

Correct 25

Correct 26
Net cash flow used for investing activities
Correct 28
Cash flows from financing activities:
  • Cash from sale of investments
  • Cash from sale of common stock
  • Increase in inventories
  • Gain on sale of investments

Correct 30

$ Correct 31
  • Depreciation
  • Decrease in accounts receivable
  • Less: Cash paid for purchase of equipment
  • Less: Cash paid to retire bonds payable

Correct 32

$ Correct 33
  • Add: Depreciation
  • Cash paid for dividends
  • Decrease in accounts receivable
  • Deduct: Increase in inventories
  • Gain on sale of investments
  • Net income, per income statement

Correct 34

Correct 35
Correct 36
Net cash flow used for financing activities
Correct 38
  • Decrease in cash
  • Increase in cash

Correct 39

$ Correct 40
Cash at the beginning of the year
Correct 42
Cash at the end of the year
$ Correct 44