Question

Based on the information provided below, complete the following worksheet to be used to prepare the statement of cash flows:
(a) Net income for the year was $30,000.
(b) Dividends of $10,000 were declared and paid.
(c) Stylish's only noncash expense was depreciation, which totaled $50,000.
(d) The company purchased plant assets for $70,000.
(e) Notes payable in the amount of $40,000 were issued during the year for cash.
(f) Merchandise inventory increased $30,000.
(g) Accounts payable decreased $10,000,


STYLISH CORPORATION Spreadsheet for Statement of Cash Flows Indirect Method For Year Ended December 31, 2013
Analysis of Changes
12/31/12 Debit Credit 12/31/13
Balance Sheet Debits
Cash $ 70,000 $ 60,000
Accounts receivable 180,000 190,000
Merchandise inventory 200,000 230,000
Plant assets 500,000 570,000
$ 950,000 $ 1,050,000
Balance Sheet Credits
Accumulated depreciation $ 100,000 $ 150,000
Accounts payable 170,000 160,000
Notes payable 350,000 390,000
Capital stock 200,000 200,000
Retained earnings 130,000 150,000
$ 950,000 $ 1,050,000
Statement of Cash Flows
Operating activities
Net income
Increase in accounts receivable
Increase in merchandise inventory
Decrease in accounts payable
Depreciation expense
Investing activities
Cash paid to purchase plant assets
Financing activities
Cash paid for dividends
Cash received from note payable

Answer

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