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Financial Accounting: LeHigh Company method for the Statement of Cash Flows.

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Using the above information, answer the following questions:

A) Did LeHigh use the direct format or indirect format? How did you determine this?

B) What amount of cash flowed into (or out of) the company this period as a result of depreciation?

C) Did the following accounts increase or decrease during the year?
1) Accounts receivable
2) Accounts payable
3) Inventory
4) Prepaid Insurance
5) Cash

D) Fully explain how you determined your answer to part "c".
See attached file #1

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The solution is well done for explaining the component parts of the Statement of Cash Flows for LeHigh Company.

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29) LeHigh Company
Cash Flow Statement
For 2000

Operating Activities
Net Income $149,000
Reconciling items:
Depreciation 10,000
Accounts Receivable 24,000
Inventory (45,000)
Accounts Payable (15,000)
Prepaid Insurance 2,000
Cash provided by operating activities $125,000

Investing Activities
Purchase of machinery ($43,000)
Purchase of land (80,000)
Cash used for investing activities ($123,000)

Financing Activities
Issuance of Stock $20,000
Repayment of loan (46,000)
Dividends Paid (18,000)
Cash used for financing activities ($44,000)

Using the above information, answer the following questions:

A) Did ...

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