| Course | AC302 Intermediate Accounting III |
|---|---|
| Unit | Unit 4 |
| Paper type | Statement of cash flows |
| Length | About 610 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC302 Unit 4
Two Balance Sheets to One Statement: A Unit 4 Statement of Cash Flows for a Shade Tree Farm
[Student Name]
Purdue University Global
AC302: Intermediate Accounting III
Unit 4 Statement of Cash Flows
[Instructor Name]
[Date]
Ferncastle Tree Farms, Inc. and every amount are composite; the standards and textbook cited are real.
Worksheet: Every Balance Sheet Change and Where It Goes
1. Cash, up $47,000, and restricted cash, up $40,000: the $87,000 the statement must explain.
2. Accounts receivable, up $64,000: operating.
3. Inventory of growing and balled trees, up $118,000: operating.
4. Prepaid expenses, down $5,000: operating.
5. Available-for-sale bonds, up $90,000, bought for cash with no year-end fair value change: investing.
6. Land, up $300,000, bought by signing a mortgage note: noncash schedule.
7. Equipment, up $425,000: $520,000 bought, less $95,000 of cost on a tree spade sold: investing.
8. Accumulated depreciation, up $180,000: $230,000 of depreciation less $50,000 removed on the sale: operating and investing.
9. Accounts payable, up $41,000, and accrued liabilities, up $12,000: operating.
10. Customer deposits on spring orders, up $114,000: operating.
11. Deferred tax liability, up $22,000: operating.
12. Mortgage note, up $300,000: noncash schedule, with row 6.
13. Preferred stock, down $150,000, and common stock and paid-in capital, up $246,000: $150,000 from converting preferred shares to common, noncash schedule; $96,000 from a 5 percent stock dividend, no schedule at all.
14. Treasury stock, up $60,000: financing.
15. Retained earnings, up $374,000: net income of $610,000 less cash dividends of $140,000 and the $96,000 stock dividend.
Ferncastle Tree Farms, Inc.: Statement of Cash Flows for the Current Year
Operating activities
1. Net income: $610,000.
2. Depreciation: add $230,000.
3. Loss on sale of tree spade: add $7,000.
4. Deferred income taxes: add $22,000.
5. Increase in accounts receivable: subtract $64,000.
6. Increase in inventory: subtract $118,000.
7. Decrease in prepaid expenses: add $5,000.
8. Increase in accounts payable: add $41,000.
9. Increase in accrued liabilities: add $12,000.
10. Increase in customer deposits: add $114,000.
Net cash provided by operating activities: $859,000.
Investing activities
1. Purchase of equipment: $520,000 outflow.
2. Proceeds from sale of tree spade: $38,000 inflow.
3. Purchase of available-for-sale bonds: $90,000 outflow.
Net cash used by investing activities: $572,000.
Financing activities
1. Cash dividends paid: $140,000 outflow.
2. Purchase of treasury stock: $60,000 outflow.
Net cash used by financing activities: $200,000.
Net increase in cash, cash equivalents and restricted cash: $87,000. Beginning balance, $333,000 of cash and $80,000 held in escrow for a land closing: $413,000. Ending balance, $380,000 of cash and $120,000 in escrow: $500,000.
Restricted cash is reconciled together with ordinary cash, so moving $40,000 into the escrow account is not shown as an outflow at all; the statement explains the change in both balances combined.
The Supporting Lines
The tree spade had cost $95,000 with $50,000 of accumulated depreciation, so its book value was $45,000; selling it for $38,000 produced the $7,000 loss added back above. The full $38,000 belongs in investing. Since 2016, restricted cash is included in the beginning and ending totals and described in a note (Financial Accounting Standards Board, 2016).
Noncash Investing and Financing Activities
1. Land acquired by issuing a mortgage note: $300,000.
2. Preferred stock converted into common stock: $150,000.
The stock dividend appears in neither the statement nor this schedule. It moved $96,000 within equity and changed no resource or obligation, so it is reported only in the statement of stockholders' equity (Financial Accounting Standards Board, 1987).
Supplemental Disclosures
Interest paid of $18,000 and income taxes paid of $171,000 are disclosed beneath the statement, as US GAAP requires with the indirect method (Kieso et al., 2019).
References
Financial Accounting Standards Board. (1987). Statement of cash flows (Statement of Financial Accounting Standards No. 95). https://www.fasb.org
Financial Accounting Standards Board. (2016). Statement of cash flows (Topic 230): Restricted cash (Accounting Standards Update No. 2016-18). https://www.fasb.org
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2019). Intermediate accounting (17th ed.). Wiley.
Reading the AC 302 Unit 4 instructions
Unit 4 of AC302 hands students comparative balance sheets, an income statement and several notes and asks for the full statement. Begin with a worksheet listing every balance sheet change and the line it feeds, or a mark sending it to the noncash schedule. Build the operating section by the indirect method. In investing, show purchases and sale proceeds gross, not netted, and use the notes to find the cost and accumulated depreciation of anything sold. In financing, show dividends paid, borrowing, repayments and share transactions. Reconcile the net change to cash, cash equivalents and restricted cash together. Report noncash investing and financing separately. Leave stock dividends out of the schedule. Add the supplemental disclosures of interest and taxes paid. Proving that every balance sheet change is used is the best check. Cite SFAS 95 and the restricted cash update in APA 7.
How the AC 302 Unit 4 example is put together
The sample's worksheet lists fifteen balance sheet changes, from cash and escrow to retained earnings, each sent to a section or to the noncash schedule. The statement follows: operating activities from $610,000 of net income to $859,000, investing with a $520,000 equipment purchase, $38,000 of sale proceeds and $90,000 of bonds, and financing with $140,000 of dividends and $60,000 of treasury stock. A proof line reconciles $413,000 of combined opening balances to $500,000. The highlighted sentence explains why moving cash into escrow is not an outflow. A supporting section works the tree spade's book value and loss and cites the 2016 restricted cash update. The noncash schedule lists the $300,000 land purchase and the $150,000 conversion, and a paragraph explains why the stock dividend is excluded. Supplemental disclosures finish the statement.
AC302 Unit 4 rubric: what earns full points
A full statement earns AC302 points in layers. The worksheet is graded for completeness: every balance sheet change must be accounted for. The operating section is checked line by line, as in the previous unit. Investing must show gross purchases and proceeds, with the gain or loss handled in operating. Financing must include every owner and lender flow. The proof against cash and restricted cash is a key point; a statement that reconciles only to cash loses it. Noncash transactions must be scheduled, and the stock dividend must be left out. Supplemental disclosures carry a final point. Explanations of the harder items, such as the equipment sale and restricted cash, add credit beyond the numbers. Purdue Global's grader also checks formal presentation, with a heading and section totals, and APA 7 references to SFAS 95 and the 2016 update.
Common AC302 Unit 4 mistakes, and how to avoid them
Students building a full statement often net the equipment sale against purchases, or put the sale proceeds in operating. The gain or loss on the sale is left in operating without adjustment. Restricted cash transfers appear as investing outflows, a treatment the 2016 update removed. Land bought with a note is shown as an investing outflow and a financing inflow, though no cash moved. Stock dividends are listed in the noncash schedule. Retained earnings changes are not broken into net income and dividends, so dividends paid are missed. The worksheet is skipped, leaving no way to prove completeness. Supplemental disclosures are forgotten. If your problem includes a bond conversion, a lease or an equity-method investment, a writer can prepare the worksheet and statement from your figures.
Get an AC302 Unit 4 example written to your instructions
Every figure in this statement traces to something your Unit 4 problem gives, so attach both balance sheets, the year's earnings and each note beneath them, because each note changes a line; include the rubric too. A worksheet, the statement and its noncash schedule return within 24-48h, proved to the cash total, with a first custom sample free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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AC302 Unit 4 questions, answered
Why is restricted cash included in the totals?
Since 2018, ASC 230 has required the statement to explain the change in cash, cash equivalents and restricted cash together, so a transfer into a restricted account is no longer a cash flow at all. The AC302 sample follows that rule and adds a short reconciliation to the balance sheet captions. Older textbook problems that treat restricted deposits as investing outflows are flagged where a section's materials still use them.
Does the stock dividend need a disclosure?
Not in the noncash schedule, which covers investing and financing activities that used no cash. A stock dividend only reclassifies equity, moving retained earnings into common stock and paid-in capital, so it involves no resources and no creditor. The statement of stockholders' equity reports it instead. The sample adds one sentence saying so, because graders sometimes test whether it was left out deliberately.
Where can I find a free AC302 Unit 4 sample paper?
This page holds a complete AC302 Unit 4 statement of cash flows for a composite tree farm, with a worksheet, all three sections, a proof against cash and restricted cash, a noncash schedule and APA 7 references.
Why is the stock dividend left out of the AC302 Unit 4 noncash schedule?
It moved $96,000 within equity without involving any resource, lender or investment. The noncash schedule covers investing and financing exchanges, so the stock dividend is reported only in the equity statement.
How is the tree spade sale handled in the AC302 Unit 4 statement?
The spade cost $95,000 with $50,000 of accumulated depreciation, a $45,000 book value. The $38,000 received goes to investing, and the $7,000 loss is added back in operating.