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Statement of Cash FlowsAttached is a question with the solution. The task is very simple and should not take long. You are to edit the solution as if the question was slightly different. Update the statement of cash flows if for 2008 the Total assets were \$876,205(instead of \$830,295) and Accounts Payable were \$148,670(instead of \$102,760). If you want the formulas and any calculaTons, select the corresponding cell and press F2(FuncTon Key on key board),

It will show all calculaTons and formulas AutomaTcally

QuesTon:

2009

2008

Cash

\$77,375

(22,955)

Available for sale securites

(noT cash equivalenTs)

15,500

85,000

69,500

AccounT receivable

80,000

68,250

-11,750

InvenTory

165,000

145,000

-20,000

Prepaid insurance

1,500

2,000

500

Land, building, and equipmenT

1,250,000

1,125,000

-125,000

AccumlaTed depreciaton

(610,000)

(572,000)

38,000

±oTal asseT

\$979,375

830,295

-149,080

AccounT payable

76,340

102,760

26,420

Salaries payable

20,000

24,500

4,500

NoTe payable (currenT)

25,000

75,000

50,000

Bond payable

200,000

-200,000

Common sTock

300,000

300,000

ReTained earnings

358,035

328,035

-30,000

±oTal liabilites and shareholders' equiTy

979,375

830,295

(1.) Sold available-for-sale securites costng \$69,500 for \$74,000.

(2.) EquipmenT costng \$20,000 wiTh a book value of \$5,000 was sold for \$6,000.

(3.) Issued 6% bonds payable aT par, \$200,000.

(4.) Purchased new equipmenT for cash \$145,000.

(5.) Paid cash dividends of \$20,000.

(6.) NeT income was \$50,000.

Required:

SoluTon: ComputaTon of the Statement of Cash Flow (Indirect Method)

Statement of Cash Flow (Indirect Method)

±he Murdock CorporaTon

For the Year Ended

ParTculars

Amount

Amount

NeT Income

\$

50,000

\$

53,000

Gain on sale of Securites

\$

(4,500)

Gain on sale of EquipmenT

\$

(1,000)

Increase in receivables

\$

(11,750)

Increase in InvenTories

\$

(20,000)

Decrease in Prepaid insurance.

\$

500

Decrease in AccounTs Payable.

\$

(26,420)

Decrease in Salaries Payable.

\$

(4,500)

Decrease in NoTe Payable.

\$

(50,000)

\$

(64,670)

Net cash provided by operaTng acTviTes

\$

(14,670)

Cash ²ow from InvesTng AcTviTes

EquipmenTs purchased

\$

(145,000)

Proceeds from Sale of securites

\$

74,000

Sale of EquipmenT

\$

6,000

Net Cash Provided by InvesTng AcTviTes

\$

(65,000)

Cash ²ow from Financing AcTviTes

Sale of bonds payable

\$

200,000

Dividends

\$

(20,000)

Net Cash Provided by Financing AcTviTes

\$

180,000

Net Changes in Cash ²ow

\$

100,330

Opening Balance of Cash

\$

(22,955)

Closing Balance of Cash

\$

77,375

1. ±he Murdock Corporaton reporTed The following balance sheeT daTa for 2009 and 2008.

Prepare a sTaTemenT of cash Fows for 2009 in good form using The indirecT meThod for cash Fows from operatng actvites.

Solution details:
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This question was answered on: May 23, 2022

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