Wedge Industries Inc – statement of cash flows

| June 10, 2016

Question

The comparative balance sheet of Wedge Industries Inc. for December 31, 2014 and 2013, is as follows:

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The following additional information is taken from the records:

Land was sold for $100.

Equipment was acquired for cash.

There were no disposals of equipment during the year.

The common stock was issued for cash.

There was a $260 credit to Retained Earnings for net income.

There was an $80 debit to Retained Earnings for cash dividends declared.

a. Prepare a statement of cash flows, using the indirect method of presenting Cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash and for any adjustments, if required.

b. Was Wedge Industries Inc. net cash flow from operations more or less than net income?

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