The following comparative balance sheets and income statement are available for AddieMae Inc.. Prepare a statement of cash flows for 2016 using the indirect method and analyze the statement. Balance Sheet as of December 31 in US$ Thousands
2016 2015
Assets Cash $3,300 $1,000
Accounts receivable (net) 1,100 600
Inventory 11,200 4,300
Total Current Assets 15,600 5,900
Plant and Equipment 3,000 2,300
Less accumulated depreciation 1,300 800
Plant and equipment (net) 1,700 1,500
Long term investments 1,200 900
Total assets $18,500 $8,300
Liabilities and Equity Accounts payable $3,300 $2,500
Accrued liabilities 700 600
Income taxes payable 400 100
Total current liabilities 4,400 3,200
Long term debt 200 -
Total liabilities 4,600 3,200
Common stock 9,900 7,300
Retained earnings 4,000 (2,200)
Total liabilities and equity $18,500 $8,300

AddieMae Inc.

Statement of Cash flows for the year ended December 31,2016

Cash flow from Operating Activities

Profit for the period                                                          6,800

Adjustment of Working Capital items ;

Increase in Accounts receivable                                    (2,300)

Increase in Inventory                                                       (6,900)

Increase in Accounts Payable                                             800

Increase in Accrued Liabilities                                             100

Net Cash from Operating Activities                              ($1,500)

Cash flows from Investing Activities

Purchase of Equipment                                                        700

Purchase of Lon term investments                                      300

Net Cash from Investing Activities                                    1,000

Cash flow from Financing Activities

Long term debt issued                                                         200

Issue of Common Stock                                                    2,600

Net Cash from financing Activities                                   2,800

Movement in Cash and Cash equivalents                    2,300

Cash and Cash Equivalents at Beginning                     1,000

Cash and Cash Equivalents at the End                         3,300

Explanation:

Cashflow statement shows the movement in the cash and cash equivalent balances. It only accounts for cash related transactions and events.

Note also that the Indirect method has been used for preparation of the Cashflow Statement as required.

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