Prepare a partial statement of cash flows


Problem 1: The following information is related to Somerset Company's fiscal year 2018.

Income Statement:

Net Income $4,000,000

Depreciation Expense 650,000

Gain on Sale of Plant Assets 50,000

Interest Expense 5,000

Balance Sheet - 12/31/17: Increase (Decrease)

Accounts Receivable ($45,000)

Plant Assets - Purchased 250,000

Plant Assets - Disposals (100,000)

Additional Information:

Common Stock exchanged for outstanding Long Term Notes Payable of $150,000

Dividends paid were $35,000

Required: Use this information to prepare a partial Statement of Cash Flows for Somerset Company. Prepare only the section related to Cash Flows from Operating Activities.

Problem 2: The following information is related to Towson Company's fiscal year 2018.

Income Statement:

Net Income $3,400,000

Depreciation Expense 550,000

Loss on Sale of Plant Assets 50,000

Interest Expense 5,000

Balance Sheet - 12/31/17: Increase (Decrease)

Accounts Payable decrease 15,000

Plant Assets - Purchased 250,000

Plant Assets - Disposals (100,000)

Additional Information:

Common Stock exchanged for outstanding Long Term Notes Payable of $125,000

Dividends paid were $30,000

Required: Use this information to determine Towson Company's Net Cash Flows from Operating Activities. If the amount is an outflow then enclose the amount with dollar sign inside of brackets ( ).

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Accounting Basics: Prepare a partial statement of cash flows
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