Answer:
Statement of Cash Flows for the year ended December 31, 2020:
Operating activities:
Operating cash flow $79,140
Increase /Decrease in working capital:
Increase in current assets ($29,000)
Decrease in current liabilities ($14,770)
Net cash flow from operations $35,370
Financing activities:
Bonds Payable issued $52,190
Cash dividends (30,000)
Treasury stock purchased (11,000)
Net cash flow from financing activities $11,190
Investing activities:
Sale of Equipment $11,770
Long-term investment
in stock (16,000)
Net cash flow from investing activities (4,230)
Net cash flows $42,330
Explanation:
a) Data and Calculations:
Net income = $60,100
Sale of Equipment = $11,770
Increase in current assets = $29,000
Decrease in current liabilities = $14,770
Building addition = $28,770
Long-term investment in stock = $16,000
Bonds Payable issued $52,190
Cash dividends = $30,000
Treasury stock purchased = $11,000
b) Adjustment of net income with non-cash flows:
Net Income $60,100
add depreciation:
Building 5,770
Equipment 10,770
Amortization 2,500
Operating cash
flow $79,140
