Statement of Cash Flows (Indirect Method) Use the following information regarding the Lund Corpor… 1 answer below »


Need your ASSIGNMENT done? Use our paper writing service to score better and meet your deadlines.  

Statement of Cash Flows (Indirect Method)
Use the following information regarding the Lund Corporation to (a) prepare a statement of cash flows using the indirect method and (b) compute Lund’s operating-cash-flow-to-current-liabilities ratio.

Accounts payable increase $9,900
Accounts receivable increase 4,400
Accrued liabilities decrease 3,300
Amortization expense 6,600
Cash balance, January 1 24,200
Cash balance, December 31 16,500
Cash paid as dividends 31,900
Cash paid to purchase land 99,000
Cash paid to retire bonds payable at par 66,000
Cash received from issuance of common stock 38,500
Cash received from sale of equipment 18,700
Depreciation expense 31,900
Gain on sale of equipment 4,400
Inventory decrease 14,300
Net income 83,600
Prepaid expenses increase 2,200
Average current liabilities 110,000

a. Use negative signs with cash outflow answers.

Statement of Cash Flows
For Year Ended December 31
Cash Flow from Operating Activities
Net Income $Answer [Correct]
Add (deduct) items to convert net income to cash basis
Depreciation Answer [Correct]
Amortization Answer [Correct]
Gain on Sale of Equipment Answer [Incorrect]
Accounts Receivable Increase Answer [Incorrect]
Inventory Decrease Answer [Correct]
Prepaid Expenses Increase Answer [Incorrect]
Accounts Payable Increase Answer [Correct]
Accrued Liabilities Decrease Answer [Incorrect]
Cash Flow Provided by Operating Activities Answer [Correct]

Cash Flow from Investing Activities
Sale of Equipment Answer [Correct]
Purchase of Land Answer [Incorrect]
Cash Used by Investing Activities Answer [Incorrect]

Cash Flow from Financing Activities
Issuance of Common Stock Answer [Correct]
Retirement of Bonds Payable Answer [Incorrect]
Payment of Dividends Answer [Incorrect]
Cash Used by Financing Activities Answer [Incorrect]
Net Decrease in Cash Answer [Incorrect]
Cash at Beginning of Year Answer [Correct]
Cash at End of Year $Answer [Correct]

b. Operating-cash-flow-to-current-liabilities ratio (Round answer to two decimal places.)

Answer [Correct]