70.2K

Verified Solution

Link Copied!

On the basis of the following data for Larson Co. for the year ending December 31 Year 2, and the preceding year ended December 31, Year 1, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. In addition to the balance sheet data, assume that: Equipment costing $125,000 was purchased for cash. Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000. The stock was issued for cash. The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000. Cash Accounts receivable (net) Inventories Equipment Accumulated depreciation Year 2 $100,000 78,000 101,500 410,000 (150,000) $539,500 Year 1 $78,000 85,000 90,000 370,000 (158,000) $465,000 Accounts payable (merchandise creditors) Cash dividends payable Common stock, $10 par Pald-in capital in excess of par-common stock Retained earnings $58,500 5,000 200,000 62,000 214,000 $539,500 $ 55,000 4,000 170,000 60,000 176,000 $465,000 Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Larson Co. Previous Larson Co. Statement of Cash Flows For Year Ended December 31, Year 2 Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities Cash flows from investing activities: n Net cash flow used for investing activities Cash flows from financing activities: Net cash flow from financing activities: Cash at the beginning of the year Cash at the end of the year Previous

Answer & Explanation Solved by verified expert

See Answer