The following information is available for Splish Brothers Inc. for the year ended December 31, 2022. Beginning cash balance $34,800
Accounts payable increase 8,265
Depreciation expense 59,450
Accounts receivable decrease 6,960
Inventory decrease 4,495
Net income 82,940
Cash received for sale of land at book value 150,800
Cash dividends paid 55,100
Income taxes payable decrease 5,655
Cash used to purchase land 117,450
Cash used to redeem bonds 95,700
Cash received from issuing stock 232,000

Required:
Prepare a statement of cash flows using the indirect method.

Cash balance at end of the year is $305,805  

Explanation:

The statement of cash flow for Splish Brothers Inc is prepared below:

Net income                                               $82,940

depreciation                                              $59,450

accounts payable increase                      $8,265

accounts receivable decrease               $6,960

inventory decrease                                $4,495

income tax payable decrease               ($5,655)

Net cash from operating activities                                                 $156,455  

Cash dividends  paid                         ($55,100)

Redemption of bonds                       ($95,700)

Issue of common stock                     $232,000

Net cash from financing activities                                                $81,200  

Cash received for sale of land        $150,800

purchase of land                              ($117,450)

Net cash from investing activities                                               $33,350  

Total increase in cash and equivalent                                        $271,005  

Cash at the beginning                                                                  $34,800

Cash at the end of the year                                                         $305,805  

answer; i believe the correct answer is (business necessity defense;

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.