Here are comparative balance sheets for Taguchi Company. TAGUCHI COMPANY Compara
ID: 2348578 • Letter: H
Question
Here are comparative balance sheets for Taguchi Company.TAGUCHI COMPANY
Comparative Balance Sheets
December 31
Assets
2012
2011
Cash $73,000 $22,000
Accounts receivable 85,000 76,000
Inventories 170,000 189,000
Land 75,000 100,000
Equipment 260,000 200,000
Accumulated depreciation (66,000) (32,000)
Total $597,000 $555,000
Liabilities and Stockholders' Equity
Accounts payable $39,000 $47,000
Bonds payable 150,000 200,000
Common stock ($1 par) 216,000 174,000
Retained earnings 192,000 134,000
Total $597,000 $555,000
Additional information:
Net income for 2012 was $103,000.
Cash dividends of $45,000 were declared and paid.
Bonds payable amounting to $50,000 were redeemed for cash $50,000.
Common stock was issued for $42,000 cash.
No equipment was sold during 2012 but land was sold at cost.
Instructions
Prepare a statement of cash flows for 2012 using the indirect method.
Explanation / Answer
Net income $103,000 Adjustments for Depreciation $34,000 Changes in working capital- Increase in Accounts receivable ($9,000) Decrease in Inventories $19,000 Decrease in Accounts payable ($8,000) ..Net cash generated from operating activities $139,000 Investing activities Purchase of equipment ($60,000) Proceeds from sale of land $25,000 ..Net cash used in investing activities ($35,000) Financing activities Proceeds from issuance of common stock $42,000 Redemption of bonds ($50,000) Payment of dividends ($45,000) ..Net cash used in financing activities ($53,000) Net increase in cash & cash equivalents $51,000 CCE at beginning of year $22,000 CCE at end of year $73,000 ...
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