A company uses negotiated transfer prices between divisions. All of the following are advantages for this type of transfer prici
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Answer:
IKIBAN INC.
Statement of cash flow using indirect method for
the year ended June 30, 2019
Particulars Amount $
Cash flow from operating activities
Net Income 145,510
<em>Adjustments to reconcile net income to net</em>
<em>cash provided by operating activities </em>
<u>Adjustment for non cash effects</u>
Depreciation 81,600
Gain on sale of equipment -4,300
<u>Change in operating assets & liabilities</u>
Increase in accounts receivable -25,500
Decrease in inventory 34,200
Decrease in prepaid expenses 3,300
Decrease in accounts payable -16,500
Decrease in wages payable -11,300
Decrease in income taxes payable <u>-2,700 </u>
Net cash flow from operating activities (A) 204,310
Cash Flow from Investing activities
New equipment purchased -80,600
Equipment sold <u>12,300</u>
Net cash Flow from Investing activities (B) -68,300
Cash Flow from Financing activities
Cash dividends paid -162,310
($31,000 + $145,510 - $14,200)
Common stock issued 83,000
Notes payable paid <u>-30,000</u>
Net cash Flow from Financing activities (C) -109,310
Net Change in cash = A+B+C $26,700
($204,310 - $68,300 - $109,310)
Beginning cash balance <u>$67,000</u>
Closing cash balance <u> $93,700</u>
