Answer and Explanation:
The preparation of the cash flow statement using the indirect method is shown below:
Splish Brothers Corporation
Cash flow Statement
For the year ended December 31, 2022
Cash Flow from Operating Activities
Net Income $323,000
Adjustments made
Add: Depreciation expense $81,000
Less: Decrease in Account payable -$4,000
Less: Increase in Account receivable -$8,100
Add: Increase in Income tax payable $4,700
Less: Increase in Inventory -$12,300
Net cash flow provided by the operating activities $61,300
Cash Flow from Investing Activities
Add: Cash received for sale of land at book value $35,000
Less: Cash used to purchase building -$146,000
Cash flow used by investing activities -$111,000
Cash Flow from Financing Activities
Less: Cash used to purchase treasury stock -32,100
Add: Cash received from issuing bonds 240,000
Less: Cash dividend paid -$11,100
Cash flow provided by financing activities $196,800
Net increase in cash $147,100
Add: Beginning cash balance $35,000
Closing Cash balance $182,100
The negative sign indicates the outflow of cash and the positive sign indicates the inflow of cash and the same is shown above
