Chapter 10
The Statement of Cash Flow
532
b) Even though cash flow from operations was negative, total cash increased by $9,300. How
did cash increase?
c) Are there any other concerns regarding the cash flow statement that have not been
covered in parts a) and b)?
AP-17B (
1
2
)
Dawson Corporation has prepared the following cash flow statement for the year-end.
Dawson Corporation
Cash Flow Statement
For the Year Ended December 31, 2016
Cash Flow from Operating Activities
Add: Net Income
$68,000
Add: Depreciation Expense
3,700
Less: Gain on Sale of Equipment
(8,000)
Changes in Assets and Liabilities
Decrease in Accounts Receivable
15,000
Increase in Inventory
(60,000)
Decrease in Accounts Payable
(5,000)
Change in Cash due to Operating Activities
$13,700
Cash Flow from Investing Activities
Sale of Equipment
84,000
Purchase of Land
(240,000)
Change in Cash due to Investing Activities
(156,000)
Cash Flow from Financing Activities
Proceeds from Issuance of Common Shares
30,000
Bank Loan
120,000
Dividends
(10,000)
Change in Cash due to Financing Activities
140,000
Total Change in Cash
(2,300)
Opening Cash Balance
12,000
Cash at the end of the year
$9,700
