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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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