ACC 342 Exam # 3 NAME:____________________________
PART I (50 POINTS)Using the information below prepare a statement of cash flows using the indirect method for 2014 for All for Knot, Inc. (a business that provides knot tying instruction and supplies to both sailors and boy scouts).
All for Knot, Inc.
Balance Sheet
2014 December 31 2013_______
Cash $35,900 $10,200
Accounts Receivable (net) 38,300 20,300
Inventory 35,000 42,000
Long-term Investments 0 15,000
Property, Plant, & Equipment 236,500 150,000
Accumulated Depreciation (37,700) (25,000)
$308,000 $212,500
Accounts Payable $ 17,000 $ 26,500
Accrued Liabilities 21,000 17,000
Long-term Notes Payable 70,000 50,000
Common Stock 130,000 90,000
Retained Earnings 70,000 29,000
$308,000 $212,500
Additional Data:
1. Net income for 2014 is $71,000.
2. Depreciation on plant assets for the year was $12,700.
3. The long-term investment was sold for $28,000 (assume gain or loss was ordinary).
4. Dividends of $30,000 were paid during the year.
5. Machinery costing $26,500 was purchased for cash.
6 .Machinery costing $60,000 was obtained by issuing a long-term note payable.
7. Paid a $40,000 long-term note payable by issuing common stock.
All for Knot, Inc.
Statement of Cash Flows
For the Year Ended December 31, 2014
Increase in Cash
Cash flows from operating activities:
Net Income $_______________
Adjustments to reconcile net income to net cash provided by
Operating activities:
——————————————————————- $—————–
——————————————————————- —————–
——————————————————————- —————-
——————————————————————- —————-
——————————————————————- —————-
——————————————————————- —————- _______________
Net cash provided by operating activities ———————–
Cash flows from investing activities:
——————————————————————- ——————
——————————————————————- ——————
Net cash provided by investing activities —————
Net cash used by financing activities:
——————————————————————- —————–
Net cash used by financing activities __________
Net increase in cash $—————
Cash, January 1, 2014 __________
Cash, December 31, 2014 $
Significant noncash investing and financing activities
—————————————————————————- $——————
—————————————————————————- $——————
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