Asked by Samantha Frederick on Jun 01, 2024
Verified
On the basis of the following data for Breach Co. for the current and preceding years ended December 31, prepare a statement of cash flows for the current year using the indirect method.Assume that equipment costing $25,000 was purchased for cash and no long term assets were sold during the period.Stock was issued for cash-3,200 shares at par.Net income for the current year was $76,000.Cash dividends declared and paid were $13,000. 
Indirect Method
A way of calculating cash flows for operating activities in the cash flow statement by adjusting net income for changes in non-cash items.
Operating Activities
Operating activities involve the day-to-day functions of a business directly related to its provision of goods and services.
Net Income
The total profit of a company after all expenses and taxes have been subtracted from total revenue.
- Gain insights into the method of assembling the statement of cash flows following the indirect strategy.
- Estimate the cash operations involved in financing activities, accounting for dividends and stock operations.
Verified Answer
Learning Objectives
- Gain insights into the method of assembling the statement of cash flows following the indirect strategy.
- Estimate the cash operations involved in financing activities, accounting for dividends and stock operations.
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