Use the Following Information to Prepare a Statement of Cash

question 5

Essay

Use the following information to prepare a statement of cash flows for Stable Equipment Company for the year ended December 31, 2016. Use the indirect method for the operating activities section of the statement.
Information:
Net income for the year 2016 was $5,000. Accounts receivable decreased $2,000, while inventories increased $4,000, and accounts payable decreased $7,000. Depreciation expense included in net income was $8,000.
During the year, a piece of land held for future expansion was sold for its book value of $8,000 and a new service truck was purchased for $14,000.
The company borrowed $18,000 on a two-year note from the bank. Dividends of $6,000 were paid in cash. Preferred stock was issued to retire $7,000 of long-term notes payable.
The beginning cash balance was $22,000 and the ending balance was $32,000.

---

Definitions:

Shoreline Hazards

Natural or human-induced processes that pose a threat to coastal areas, including erosion, flooding, and pollution.

Offshore Islands

islands located away from the mainland, often surrounded by relatively deep water.

Storm Surge

A storm surge is an abnormal rise of water generated by a storm, over and above the predicted astronomical tides.

Hurricane Effects

The impacts caused by hurricanes, including high winds, heavy rainfall, storm surges, flooding, and coastal erosion.