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Pro-Forma Statement of Cash Flows

The accountants at Karl's Fish Hatchery are currently preparing the pro-forma statement of
cash flows for May. In getting ready to prepare the statement, they have the following information
available:
Dividends to be paid in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,500
Bonds to be issued in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
Equipment to be purchased in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Repayment of short-term loans in May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
Depreciation expense during May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500
Expected May net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Expected changes in current assets and
liabilities during May:
Accounts receivable decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
Accounts payable decrease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,730
Increase in inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,580
Increase in income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,550
Prepare Karl's pro-forma statement of cash flows (using the indirect method).

Solution Summary

The solution explains how to prepare a pro-forma statement of cash flows using the indirect method

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