Cash Flow Statement - Indirect method?

Question

Comparative Balance Sheets – Green Co.

2007/2006/change

Cash … 807,500 / 700,000 / 107,500

AR … 1,128,000 / 1,168,000 / (40,000)

Inventories … 1,850,000 / 1,715,000 / 135,000

Property, plant & equip … 3,307,000 / 2,967,000 / 340,000

Accumulated depreciation … (1,165,000) / (1,040,000) / (125,000)

Investment in ABC … 305,000 / 275,000 / 30,000

Loan receivable … 262,500 / - / 262,500

AP … 1,015,000 / 955,000 / 60,000

Income tax payable … 30,000 / 50,000 / (20,000)

Dividends payable … 80,000 / 100,000 / (20,000)

Capital lease obligation … 400,000 / - / 400,000

Capital stock, common $1 par … 500,000 / 500,000 / -

Additional paid-in capital … 1,500,000 / 1,500,000 / -

Retained earnings … 2,970,000 / 2,680,000 / 290,000

Additional info:

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Answer 1

Indirect Method Cash Flow Statement

Cash flows from operating activities

Net income $370,000

Adjustments for:

Depreciation $150,000

Share of results of ABC ($30,000)

Interest from TLC ($15,000)

Gain on sale of equipment ($5,000)

Changes in working capital:

Decrease in AR $40,000

Increase in inventories ($135,000)

Increase in AP $60,000

Decrease in taxes payable ($20,000)

Net cash from operating activities $415,000

Cash flows from investing activities

Loan given to TLC ($300,000)

Repayment from TLC $37,500

Interest from TLC $15,000

Proceeds from sale of equipment $40,000

Net cash used in investing activities ($207,500)

Cash flows from financing activities

Dividends paid ($100,000)

Net cash used in financing activities ($100,000)

Net increase in cash and cash equivalents $107,500

CCE at beginning of period $700,000

CCE at end of period $807,500