Chapter 10
The Statement of Cash Flow
535
Case Study
CS-1 (
2
)
Granite Surfaces specializes in making granite countertops. A new accounting clerk has
compiled the following information to prepare the cash flow statement for the year ended
December 31, 2016.
• Net income for the year was $114,140.
• Depreciation expense was $15,300.
• Equipment was sold for a gain of $16,000. Cash proceeds from the sale were
$36,000.
• Equipment was purchased for $250,000.
• Dividends of $50,000 were paid.
• Accounts receivable increased by $31,400.
• Inventory decreased by $38,700.
• Accounts payable increased by $41,100.
• Bank loans increased by $55,000.
• Shares were sold for $50,000 (also their book value).
• Cash balance on January 1, 2016 was $114,800.
• Cash balance on December 31, 2016 was $117,640.
