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Statement of Cash Flows

For the year ended December 31, 2018

Cash Flows From Operating Activities:

Net Income

$57,600

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:

Depreciation expense

$16,700

Decrease in account receivables ($22,000-$15,300)

$6,700

Increase in merchandise inventory ($62,600-$60,400)

($2,200)

Increase in account payable ($28,100 - $26,100)

$2,000

Decrease in accrued liabilities ($11,600-$10,300)

($700)

Net cash provided/ (used) in operating activities

$80,100

Cash Flows From Investing Activities:

Purchase of equipment

($54,700)

Purchase of building

($98,000)

Net cash provided/ (used) in investing activities

($152,700)

Cash Flows From Financing Activities:

Issuance of common stock

$105,000

Issuance of notes payable

$48,000

Dividend paid

($16,200)

Net cash provided/ (used) in financing activities

$136,800

Net increase/(Decrease) in cash

$64,200

Cash Balance, December 31, 2017

$23,500

Cash Balance, December 31, 2018

$87,700

Particulars

Amount

Reason

Net cash provided/ (used) in operating activities

$80,100

When the core business activities flourishing and expenses gets minimal it leads to positive cash flow from operating activity.

Net cash provided/ (used) in investing activities

($152,700)

When the company invest in more PPE, financial instruments etc. it leads to higher cash outlay by which negative cash flow from investing activity arises.

Net cash provided/ (used) in financing activities

$136,800

When the company issues more securities or borrow money from bank and less dividend payments or repayable of the borrowings or loans etc. it leads to positive cash flow from financing activities.