Answer:
<u>Statement of Cash Flows</u>
Cash flow From Operating Activities
Net income $524,580
<em>Adjustment for Non Cash Items :</em>
Depreciation expense - buildings $51,660
Depreciation expense - machinery and equipment $22,680
Patent amortization $5,040
<em>Adjustments for Changes in Working Capital Items :</em>
Increase in Accounts receivable -$73,080
Decrease in Inventories $134,680
Increase in Prepaid expenses -$6,400
Decrease in Accounts payable -$89,600
Net Cash From Investing Activities $569,540
Cash flow From Investing Activities
Buildings -$579,600
Net Cash From Investing Activities -$579,600
Cash flow From Financing Activities
Mortgage Note $224,000
Dividends Paid -$123,480
Net Cash From Financing Activities $100,520
Movement during the year $82,320
Cash and Cash Equivalents at beginning of the year $360,920
Cash and Cash Equivalents at end of the year $443,240
Explanation:
For Determination of Dividends Paid, open a Dividends Paid Account as follows :
Debit:
Cash (Balancing figure) 123,480
Balance c/d 32,760
Totals 156,240
Credit
Balance b/d 25,200
Dividends Declared 131,040
Totals 156,240
