Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 38

Statement of cash flows-indirect method
The comparative balance sheet of Pelican Joe Industries Inc. for December 31, 2016 and 2015, is as follows:

The following additional information is taken from the records:
1. Land was sold for $125.
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 $325 credit to Retained Earnings for net income.
6. There was an $100 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.
b. Was Pelican Joe Industries Inc. net cash flow from operations more or less than net income What is the source of this difference