The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:

1

Dec. 31, 20Y2

Dec. 31, 20Y1

2

Assets

3

Cash

$183

$14

4

Accounts receivable (net)

55

49

5

Inventories

117

99

6

Land

250

330

7

Equipment

205

175

8

Accumulated depreciation-equipment

(68)

(42)

9

Total assets

$742

$625

10

Liabilities and Stockholders’ Equity

11

Accounts payable (merchandise creditors)

$51

$37

12

Dividends payable

5

13

Common stock, $1 par

125

80

14

Paid-in capital: Excess of issue price over par—common stock

85

70

15

Retained earnings

476

438

16

Total liabilities and stockholders’ equity

$742

$625

The following additional information is taken from the records:

1. Land was sold for $120.
2. Equipment was acquired for cash.
3. There were no disposals of equipment during the year.
4. The common stock was issued for cash.
5. There was a $62 credit to Retained Earnings for net income.
6. There was an $24 debit to Retained Earnings for cash dividends declared.
Required:

A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
B.
Was the net cash flow from operations for Olson-Jones Industries Inc. more or less than net income? What is the source of this difference?

Labels and Amount Descriptions
Amortization of intangible assets
Cash used for dividends
Cash used for purchase of equipment
Cash from sale of common stock
Cash from sale of land
December 31, 20Y2
Decrease in accounts payable
Decrease in accounts receivable
Decrease in cash
Decrease in inventories
Depreciation
For the Year Ended December 31, 20Y2
Gain on sale of land
Increase in accounts payable
Increase in accounts receivable
Increase in cash
Increase in inventories
Loss on sale of land
Net cash flow from operating activities
Net cash flow used for operating activities
Net cash flow from investing activities
Net cash flow used for investing activities
Net cash flow from financing activities
Net cash flow used for financing activities
Net income
Net loss

A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Olson-Jones Industries Inc.

Statement of Cash Flows

1

Cash flows from operating activities:

2

3

Adjustments to reconcile net income to net cash flow from operating activities:

4

5

6

Changes in current operating assets and liabilities:

7

8

9

10

11

Cash flows from (used for) investing activities:

12

13

14

15

Cash flows from (used for) financing activities:

16

17

18

19

20

Cash at the beginning of the year

21

Cash at the end of the year

B. Was the net cash flow from operations for Olson-Jones Industries Inc. more or less than net income? What is the source of this difference?

Net cash flow from operations was than net income.

The source(s) of the difference are: Check all that apply.

Depreciation expense

Sale of common stock

Changes in current operating assets and liabilities

Purchase of equipment

Gain on the sale of land

Dividends paid