The following information is available for Ramos Corporation for the year ended December 31, 2014.

Beginning cash balance $45,000

Accounts payable decrease 3,700

Depreciation expense 162,000

Accounts receivable increase 8,200

Inventory increase 11,000

Net income 284,100

Cash received for sale of land at book value 35,000

Cash dividends paid1 2,000

Income taxes payable increase 4,700

Cash used to purchase building 289,000

Cash used to purchase treasury stock 26,000

Cash received from issuing bonds 200,000

Instructions:

Prepare a statement of cash flows using the indirect method.

The preparation of the Cash Flows from three Activities-Indirect Method is shown below:

a. Cash flow from Operating activities

Net income $284,100

Adjustment made:

Add : Depreciation expense $162,000

Less: Increase in accounts receivable - $8,200

Add: Increase in Income taxes payable $4,700

Less: Increase in inventory - $11,000

Less: Decrease in accounts payable - $3,700

Total of Adjustments $143,800

Net Cash flow from Operating activities $427,900

b. Cash flow from Investing activities

Cash received for sale of land at book value $35,000

Cash used to purchase building - $289,000

Net Cash flow from Investing activities - $254,000

c. Cash flow from Financing activities

Cash received from issuing bonds $200,000

Cash dividends paid - $12,000

Cash used to purchase treasury stock - $26,000

Net Cash flow from Financing activities $162,000

Now

Net Cash flow from Operating activities $427,900

Net Cash flow from Investing activities - $254,000

Net Cash flow from Financing activities $162,000

Net increase (decrease) in cash for the year is $335,900

Add: Beginning cash balance $45,000

Ending cash balance $380,900