Prepare a statement of cash flows

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Reference no: EM132727129

Question - Statement of Cash Flows-Indirect Method

The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:

	Dec. 31, 20Y2	Dec. 31, 20Y1
Assets Cash	$140	$45
Accounts receivable (net)	80	57
Inventories	50	31
Land	114	128
Equipment	64	50
Accumulated depreciation-equipment	(17)	(9)
Total Assets	$431	$302
Liabilities and Stockholders' Equity Accounts payable (merchandise creditors)	$54	$45
Dividends payable	9	-
Common stock, $1 par	28	14
Paid-in capital: Excess of issue price over par-common stock	67	35
Retained earnings	273	208
Total liabilities and stockholders' equity	$431	$302

The following additional information is taken from the records:

Land was sold for $35.

Equipment was acquired for cash.

There were no disposals of equipment during the year.

The common stock was issued for cash.

There was a $93 credit to Retained Earnings for net income.

There was a $28 debit to Retained Earnings for cash dividends declared.

Required -

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, or any negative adjustments.

b. Was Olson-Jones Industries Inc.'s net cash flow from operations more or less than net income?

Reference no: EM132727129

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