Statement of Cash Flows—Indirect Method
The comparative balance sheet of Charles Inc. for December 31, 2014 and 2013, is shown as follows:
Additional data obtained from an examination of the accounts in the ledger for 2014 are as follows:The investments were sold for $210,000 cash.Equipment and land were acquired for cash.There were no disposals of equipment during the year.The common stock was issued for cash.There was a $190,280 credit to Retained Earnings for net income.There was a $72,000 debit to Retained Earnings for cash dividends declared.
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.
Charles Inc. Statement of Cash Flows For the Year Ended December 31, 2014 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: $ $ Net cash flow used for investing activities Cash flows from financing activities: $ Net cash flow from financing activities $ Cash at beginning of the year Cash at end of the year$
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Calculate the increases and decreases in the current asset/liability accounts over the period. How do these increases or decreases impact the amount of cash a company has? Were there any purchases or sales of noncurrent assets during the year? If there were any sales of noncurrent assets, were these noncurrent assets sold at what the company had initially paid? Or were the assets sold for more or less than the book value? Did the company engage in any activities that affected the equity or debt in their company?
Learning Objective 2.Check My Work (2 remaining)Icon Key100% CorrectPartially CorrectVisited, Not Yet JudgedIncorrectNeeds Instructor GradingNot Intended for GradingQuestion 1 of 1Problem 13-1A