Question

Crane Company
Income Statement
For the Year Ended December 31, 2022
Sales revenue $ 145,200
Cost of goods sold 105,000
Gross profit 40,200
Selling expenses $10,800
Administrative expenses 3,600 14,400
Income from operations 25,800
Interest expense 1,800
Income before income taxes 24,000
Income tax expense 4,800
Net income $ 19,200
Additional data:
1. Depreciation expense was $10,500.
2. Dividends declared and paid were $12,000.
3. During the year equipment was sold for $5,100 cash.
This equipment cost $10,800 originally and had accumulated depreciation of $5,700 at the time of sale.
Prepare a statement of cash flows using the indirect method.

Answer 1

Answer:

statement of cash flows using the indirect method

Cash flow from Operating Activities

Cash Receipts from Customers                                          $145,200

Cash Paid to Supplies and Employees                             ($108,900)

Net Cash from Operating Activities                                     $36,300

Cash flow from Investing Activities

Proceeds from Sale of Equipment                                         $5,100

Net Cash from Investing Activities                                         $5,100

Cash flow from Financing Activities

Dividends Paid                                                                     ($12,000)

Net Cash from Financing  Activities                                    ($12,000)

Movement during the period                                             $29,400

Cash and Cash Equivalents at Beginning of the Period       0

Cash and Cash Equivalents at the End of the Period     $29,400

Explanation:

Cash Receipts from Customers Calculation :

Sales revenue $ 145,200

Assuming Cash Sales

Cash Paid to Supplies and Employees Calculation :

Cost of goods sold                                   $105,000

Add Selling Expenses                                 $10,800

Add Administrative expenses                      $3,600

Less Depreciation                                      ($10,500)

Cash Paid to Supplies and Employees   $108,900