The following are the financial statements of Nosker Company. NOSKER COMPANY
Comparative Balance Sheets
December 31
Assets 2017 2016
Cash $37,200 $19,800
Accounts receivable 33,000 18,700e
Inventory 30,400 20,400
Equipment 59,300 78,000
Accumulated depreciation--equipment (29,300 ) (23,300 )
Total $130,600 $113,600
Liabilities and Stockholders' Equity
Accounts payable $28,700 $ 16,000
Income taxes payable 7,300 8,300
Bonds payable 27,400 33,100
Common stock 18,200 14,300
Retained earnings 49,000 41,900
Total $130,600 $113,600
NOSKER COMPANY
Income Statement
For the Year Ended December 31, 2017
Sales revenue $242,900
Cost of goods sold 175,600
Gross profit 67,300
Operating expenses 24,800
Income from operations 42,500
Interest expense 4,000
Income before income taxes 38,500
Income tax expense 7,500
Net income $31,000
Additional data:
1. Dividends declared and paid were $23,900.
2. During the year equipment was sold for $9,600 cash. This equipment cost $18,700 originally and had a book value of $9,600 at the time of sale.
3. All depreciation expense, $15,100, is in the operating expenses.
4. All sales and purchases are on account.
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e. g. -15,000 or in parenthesis e. g. (15,000).)

Nosker Company statement of cash flows using the indirect method

Cash flow from Operating Activities

Net income                                                                            31,000

Adjustment for Non-cash items :

Depreciation                                                                          15,100

Adjustment to Changes in Working Capital :

Increase in Accounts receivable                                        (14,000)

Increase in Inventory                                                           (10,000)

Increase in Accounts payable                                              12,700

Income taxes paid (8,300 + 7,500 - 7,300)                         (8,500)

Net Cash from Operating Activities                                       26,300

Cash flow from Investing Activities

Proceeds from sale of Equipment                                        9,600

Net Cash from Investing Activities                                        9,600  

Cash flow from Financing Activities

Dividends Paid                                                                    (23,900)

Repayment of Bonds                                                            (5,700)

Issuance of Common Stock                                                  3,900

Net Cash from Financing Activities                                   (25,700)

Movement during the period                                               17,400

Cash and Cash Equivalents at Beginning of the Period    19,800

Cash and Cash Equivalents at End of the Period              37,200

Explanation:

Calculation of Profit or Loss on Sale of Equipment

Equipment Disposal T - Account

Debits :

Book Value           $9,600

Totals                    $9,600

Credits:

Cash Receipt        $9,600

Totals                    $9,600

Remember to use the Indirect method in determining cash flow from operating activities.