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Holly Company

Using the indirect method, prepare a statement of cash flows for 2007.

Exercise 13-8 Prepare a statement of Cash Flows (Indirect Method)
Comparative financial statement data for Holly Company

31-Dec
2007 2006
Cash 4 7
Accounts Recievable 36 29
Inventory 75 61
Plant and Equipment 210 180
Accumulated Depreication -40 -30
Total Assets 285 247
Accounts Payable 45 39
Common Stock 90 70
Retained Earnings 150 138
Total liabilities and stockholder's equity 285 247

For 2007, the company reported net income as follows:
Sales 500
Cost of Goods Sold 300
Gross Margin 200
Selling and admin expense 180
Net Income 20

Dividends of $8 were declared and paid during 2007.

Required
Using the indirect method, prepare a statement of cash flows for 2007.

Solution Preview

Exercise 13-8 Prepare a statement of Cash Flows (Indirect Method)
Comparative financial statement data for Holly Company

31-Dec Increase Activity
2007 2006 (Decrease)
Cash 4 7 -3
Accounts Recievable 36 29 7 Operating
Inventory 75 61 14 Operating
Plant and Equipment 210 180 30 Investing
Accumulated Depreication -40 -30 10 Operating
Total Assets 285 247
Accounts Payable 45 39 6 Operating
Common Stock 90 70 20 Financing
Retained Earnings 150 138 12
Total liabilities and stockholder's equity 285 247

For 2007, the company reported net income as follows:
Sales 500
Cost of Goods Sold 300
Gross Margin 200
Selling and admin expense 180
Net Income 20

Dividends of $8 were declared and paid during 2007.

Required
Using the indirect method, prepare a statement of cash flows for ...

Solution Summary

This solution is comprised of a detailed explanation to prepare a statement of cash flows for Holly Company using indirect method.

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