Reference no: EM131820179

Question - Preparing a Statement of Cash Flows

 

Mohana Resorts Corporations is developing its annual financial statements at December 31, 2015.  The statements are complete except for the statement of cash flows.  The completed comparative balance sheets and income statement are summarized as follows:

 

	2015	2014
Balance Sheet at December 31
Cash	$136,500	$127,000
Accounts Receivable	$30,500	$44,500
Merchandise Inventory	$44,500	$36,000
Property and Equipment	$418,500	$300,000
Less: Accumulated Depreciation	($118,000)	($91,500)
	$512,000	$416,000
Accounts Payable	$18,000	$38,000
Wages Payable	$8,000	$2,400
Note Payable, Long Term	$119,000	$142,000
Contributed Capital	$197,000	$131,800
Retained Earnings	$170,000	$101,800
	$512,000	$416,000
Income Statement for 2015
Sales	$390,000
Cost of Goods Sold	$184,000
Depreciation Expense	$26,500
Other Expenses	$86,000
Net Income	$93,500

 

 

Additional Data:

 

a. Bought equipment for cash, $118,500.

 

b. Paid $23,000 on the long-term note payable. 

 

c. Issued new shares of stock for $65,200 cash. 

 

d. Dividends of $25,300 were declared and paid. 

 

e. Other expenses all relate to wages.

 

f. Accounts payable includes only inventory purchases made on credit.  

 

 

Required:

 

1. Prepare the statement of cash flows using the indirect method for the year ended December 31, 2015. 

 

 

2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash by Mohana Resorts during 2015.