Reference no: EM131705191
Question - Statement of Cash Flows-Indirect Method
The comparative balance sheet of Tru-Built Construction Inc. for December 31, 2014 and 2013, is as follows:
|
Dec. 31, 2014
|
Dec. 31, 2013
|
|
Assets
|
|
|
|
Cash
|
$206
|
$69
|
|
Accounts receivable (net)
|
117
|
87
|
|
Inventories
|
74
|
48
|
|
Land
|
168
|
196
|
|
Equipment
|
94
|
76
|
|
Accumulated depreciation-equipment
|
(25)
|
(13)
|
|
Total
|
$634
|
$463
|
|
Liabilities and Stockholders' Equity
|
|
|
|
Accounts payable (merchandise creditors)
|
$80
|
$69
|
|
Dividends payable
|
13
|
-
|
|
Common stock, $10 par
|
42
|
22
|
|
Paid-in capital in excess of par-common stock
|
87
|
54
|
|
Retained earnings
|
412
|
318
|
|
Total
|
$634
|
$463
|
The following additional information is taken from the records:
1. Land was sold for $70.
2. Equipment was acquired for cash.
3. There were no disposals of equipment during the year.
4. The common stock was issued for cash.
5. There was a $136 credit to Retained Earnings for net income.
6. There was a $42 debit to Retained Earnings for cash dividends declared.
a. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required.
b. Was Tru-Built Construction Inc.'s cash flow from operations more or less than net income?