TAGUCHI COMPANY Comparative Balance Sheets December 31 Assets 2011 2010 Cash $ 7
ID: 2386298 • Letter: T
Question
TAGUCHI COMPANYComparative Balance Sheets
December 31
Assets 2011 2010
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:
1. Net income for 2011 was $103,000.
2. Cash dividends of $45,000 were declared and paid.
3. Bonds payable amounting to $50,000 were redeemed for cash $50,000.
4. Common stock was issued for $42,000 cash.
5. No equipment was sold during 2011, but land was sold at cost.
Instructions
Prepare a statement of cash flows for 2011 using the indirect method.
Explanation / Answer
Cash Flows from Operating Activities Net Income $103,000 Add: Decrease in Inventories $19,000 Add: Increase in Accumulated Depreciation $34,000 Less: Increase Accounts Receivable ($9,000) Less: Decrease in Accounts Payable ($8,000) Cash Flows from Investing Activities Add: Cash received from sale of land $25,000 Less: Inrease in Equipment ($60,000) Cash Flows from Financing Activites Less: Cash Paid for dividends ($45,000) Schedule of Noncash Financing/Investing Activities Common Stock was issued to retire Bonds Payable $50,000
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