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Anit [1.1K]
3 years ago
15

Nathan Herrmann has completed the basic format to be used in preparing the statement of cash flows (indirect method) for CEO Con

sultants.Listed below in random order are line items to be included in the statement of cash flows.Purchase of equipment $ 229,000Increase in inventory 35,000Increase in prepaid rent 7,500Payment of dividends 31,000Depreciation expense 13,000Increase in accounts receivable 47,000Increase in accounts payable 15,000Loss on sale of land 12,000Net income 69,000Repayment of notes payable 49,000Cash received from the sale of land 7,500Issuance of common stock 241,000Prepare the statement of cash flows for CEO Consultants using the indirect method.
Business
1 answer:
yarga [219]3 years ago
7 0

Answer:

Ending cash balance is -$41,000.

Explanation:

This can be prepared as follows:

Nathan Herrmann

Cash Flow Statement

for the year ended ...

<u>Details                                                                   $                      $             </u>

Net income                                                      69,000  

Adjustment to reconcile net income    

Depreciation expense                                     13,000  

Loss on sale of land                                         12,000  

(Increase) decrease in current assets

Increase in inventory                                     (35,000)

Increase in prepaid rent                                  (7,500)

Increase in accounts receivable                   (47,000)

Increase (decrease) in current liabilities:  

Increase in accounts payable                      <u>    15,000  </u>

Net cash from operating activities                                         19,500

<u>Cash flows from investing activities:  </u>

Cash received from the sale of land                7,500  

Purchase of equipment                              <u> (229,000) </u>

Net cash flows from Investing activities                            (221,500)

<u>Cash flows from financing activities:   </u>

Payment of dividends                                      (31,000)

Repayment of notes payable                         (49,000)

Issuance of common stock                            <u> 241,000  </u>

Net cash from financing activities                                        <u>  161,000  </u>

Increase / (Decrease) in cash                                                   (41,000)

Beginning cash balance                                                         <u>            -    </u>

Ending cash balance                                                              <u>   (41,000) </u>

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Sparks Fireworks manufactures and sells fireworks. Their raw materials used is $71,500. Their beginning raw materials inventory
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Answer:

The correct answer would be, $70500

Explanation:

Raw Material Turnover means what amount of raw materials is used within a specific period of time. So the raw material turnover would be calculated by adding the beginning inventory with the amount of material used within the period, and then the remaining material will be deducted. So the whole calculations are shown as follows:

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