Prepare a statement of cash flows using the indirect method

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Reference no: EM13969109

The comparative balance sheet of Pelican Joe Industries Inc. for December 31, 2016 and 2015, is as follows:

1

 

Dec. 31, 2016

Dec. 31, 2015

2

Assets

   

3

Cash

$490.00

$160.00

4

Accounts receivable (net)

$280.00

$200.00

5

Inventories

$175.00

$110.00

6

Land

$400.00

$450.00

7

Equipment

$225.00

$175.00

8

Accumulated depreciation-equipment

($60.00)

($30.00)

9

Total assets

$1,510.00

$1,065.00

10

Liabilities and Stockholders' Equity

   

11

Accounts payable (merchandise creditors)

$175.00

$160.00

12

Dividends payable

$30.00

 

13

Common stock, $10 par

100

50

14

Paid-in capital: Excess of issue price over par-common stock

250

125

15

Retained earnings

955

730

16

Total liabilities and stockholders' equity

1510

1065

Required:

A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash out flow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section.

B. Was the net cash flow from operations for Pelican Joe Industries Inc. more or less than net income? What is the source of this difference?

Reference no: EM13969109

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