Answer:
Increase in cash = $50,740
Explanation:
The statement of cash flows for 2020 can be prepared as follows:
Culver Corporation
Statement of Cash Flows
For December 31, 2020
<u>Particulars $ $ </u>
Net income 127,440
Adjustment to reconcile net income:
Depreciation expenses (w.1) 26,740
(Increase) decrease in current assets:
Increase in accounts receivable (w.2) (15,740)
Decrease in inventory (w.3) 9,260
Increase (decrease) in current liabilities:
Decrease in accounts payable (w.4) <u> (13,260) </u>
Net cash from operating activities 134,440
<u>Cash Flow from Investing Activities </u>
Sales of land (w.5) 39,260
Purchase of equipment (w.6) <u> (59,740) </u>
Net cash from investing activities 20,480
<u>Cash Flow from Financing Activities</u>
Cash dividends paid <u> (63,220) </u>
Net cash from financing activities <u> 63,220 </u>
Increase / (Decrease) in cash 50,740
Beginning cash balance <u> 22,000 </u>
Ending cash balance <u> 72,740</u><u> </u>
Workings:
w.1: Depreciation expenses = Accumulated Depreciation in 2020 - Accumulated Depreciation in 2019 = $70,220 - $43,480 = $26,740
w.2: Increase in accounts receivable = Accounts receivable in 2020 - Accounts receivable in 2021 = $83,220 - $67,480 = $15,740
w.3: Decrease in inventory = Inventory in 2020 - Inventory in 2019 = 181220 190480 = -$9,260
w.4: Decrease in accounts payable = Accounts payable in 2020 - Accounts payable in 2019 = ($35,220 - $48,480) = $13,260
w.5: Sales of land = Land in 2019 - Land in 2020 = ($111,480 - $72,220) = $39,260
w.6: Purchase of equipment = Equipment in 2020 - Equipment in 2019 = $261,220- $201,480 = $59,740
