P14A-44B Preparing the statement of cash flows—direct method
Learning Objective 4
Appendix 14A
1. Net Cash Prov. by Op. Act. $136,300
Collections from Cust. $443,700
Use the Sweet Valley data from Problem P14-41B.
Requirements
1. Prepare the 2018 statement of cash flows by the direct method.
2. How will what you learned in this problem help you evaluate an investment?
SOLUTION
Requirement 1
P14A-44B
Requirement 1, cont.
Requirement 2
P14-45B Using a spreadsheet to prepare the statement of cash flows—indirect method
Learning Objective 5
Appendix 14B
Cash Pmt. of Div. $28,200
Cash Pmt. of N/P $13,000
The 2018 comparative balance sheet and income statement of Attleboro Group, Inc. follow.
Attleboro disposed of a plant asset at book value in 2018.
P14-45B. cont.
Prepare the spreadsheet for the 2018 statement of cash flows. Format cash flows from operating
activities by the indirect method. A plant asset was disposed of for $0. The cost and accumulated
depreciation of the disposed asset was $13,600. There were no sales of land, no retirement of
common stock, and no treasury stock transactions. Assume plant asset and land acquisitions were
for cash.
P14-45B, cont.
SOLUTION
P14-45B, cont.
Excel Skill Problem
P14-46 Using Excel to prepare the statement of cash flows, indirect method
The James Island Clothing Company began operations on July 1, 2018. The adjusted trial
balance as of
December 31, 2018, appears below, along with transaction data for 2018
Transaction data for 2018
Cash paid for purchase of office equipment $ 6,000
Cash paid for purchase of truck 5,000
Acquisition of plant assets with a long-term notes payable 33,000
Cash payment of dividends 1,000
Cash receipt from issuance of common stock 100,000
P14-46B, cont.
Requirements
1. Complete the worksheet for the James Island Clothing Company, filling in the Transaction
Analysis columns. Note: Some of the input cells marked in blue may not require entries.
2. Prepare the James Island Clothing Company statement of cash flows for the year ended
December 31, 2018. Use the indirect method.
SOLUTION