Asked by marta kebede on Jun 18, 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 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. 
Statement of Cash Flows
A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, divided into operating, investing, and financing activities.
Operating Activities
Financial transactions and events related to the core business functions, including revenue and expense activities.
Indirect Method
A cash flow statement presentation method that adjusts net income for the changes in balance sheet accounts to calculate cash flow from operating activities.
- Develop the cash flow statement through the indirect approach.
- Revise net profit by accounting for variations in operational assets and liabilities to determine operating activities' cash flows.
- Evaluate the consequences of issuing and buying back shares on the statement of cash flows.
Verified Answer
QE
Learning Objectives
- Develop the cash flow statement through the indirect approach.
- Revise net profit by accounting for variations in operational assets and liabilities to determine operating activities' cash flows.
- Evaluate the consequences of issuing and buying back shares on the statement of cash flows.