Answer:
The cash flows statement is shown below:
Explanation:
Branch Company
Cash Flows Statement
For the Year Ended on December 31
Cash Flows for Operating Activities:
Net income $56,000
Items to reconcile net income to cash flows for operating activities
Depreciation expense $57,000
Loss on sale of land $5,000
Decrease in accounts receivable $7,000
Increase in inventories ($16,500)
Decrease in accounts payable ($1,500)
Net cash flows for operating activities $107,000
Cash Flows for Investing Activities:
Cash paid for equipment purchased ($125,000)
Cash received for land sold $15,000
Net cash flows for investing activities ($110,000)
Cash Flows from Financing Activities:
Cash received for common stock issued $32,000
Cash paid for dividends ($18,000)
Net cash flows for financing activities $14,000
Net Increase in Cash $11,000 ($107,000 + $14,000 - $110,000)
Cash balance - January 1 $54,000
Cash balance - December 31 $65,000
