Erroneous Statement of Cash Flows
Ryan Company's bookkeeper prepared the following 2016 statement of cash flows:
Flows of Cash Statement
December 31, 2016 |
| Sources (Inflows) of Cash | | |
| Net Source from Operations | | |
| Net income | $47,800 | |
| Add: Cash receipt from sale of land | 6,500 | |
| Inflow from issuing 10% bonds payable | 25,000 | |
| Depreciation expense | 13,200 | |
| Reduction in inventory | 1,900 | |
| Less: Outflow to buy equipment | (16,400) | |
| Increase in prepaid expenses | (700) | |
| Cash (principal) paid on long-term note | (9,500) | |
| ordinary gain | (2,000) | |
| Total source from operations | | $65,800 |
| Other Sources (Inflows) of Cash | | | |
| Loss on sale of land | $2,300 | |
| Increase in accounts payable | 1,000 | |
| Cash from issuing preferred stock | 38,700 | |
| Patent amortization expense | 2,100 | |
| Total other sources of cash | | 44,100 |
| Sources (Financing) Not Affecting Cash | | |
| Issuance of common stock for patent | | 11,000 |
| Total inflows of cash | | $120,900 |
| Uses (Outflows) of Cash | | |
| To purchase building | $(62,000) | |
| Increase in accounts receivable | (7,800) | |
| For acquiring marketable securities | (7,100) | |
| Decrease in income taxes payable | (1,400) | |
| Total uses of cash | | (78,300) |
| Uses (Investing) Not Affecting Cash | | |
| Acquisition of patent by issuing common stock | | (11,000) |
| Net inflow before dividends | | $ 31,600 |
| Less: Cash dividends | | (24,000) |
| Net increase in cash | | $7,600 |
| Cash, January 1, 2016 | | 15,300 |
| Cash, December 31, 2016 | | $22,900 |
After a thorough investigation, you have determined that the amounts of the items listed on the statement are correct. However, you notice several items that are incorrectly classified and reported.
Required
Prepare a corrected 2016 statement of cash flows for the Ryan Company. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.
Operating Activities
________________ __________
Adjustment for non cash income items:
________________ __________
________________ __________
________________ __________
________________ __________
Adjustments for cash flow effects from working capital items:
________________ __________
________________ __________
________________ __________
________________ __________
________________ __________
Net cash provided by operating activities ____________
Investing Activities:
________________ __________
________________ __________
________________ __________
________________ __________
Net cash used for investing activities _________
Financing Activities:
________________ __________
________________ __________
________________ __________
________________ __________
Net cash provided by financing activies _________
Net increase in cash _________
Cash, january 1, 2016 _________
Cash, december 31, 2016 _________
Investing and Financing Activities not Affecting Cash
Investing Activities:
Acquistion of patent by issuing commons stock ______________
Financing Activities:
Issuance of common stock for patent ____________
