Comparative Balance Sheets For period Ending Dec. 31 Assets 2008 2007 Cash 77,38

Question

Comparative Balance Sheets For period Ending Dec. 31 Assets 2008 2007 Cash            77,380            23,320 Accounts receivable            90,100            80,560 Inventories          180,200          200,340 Land            79,500          106,000 Equipment          275,600          212,000 Accumulated depreciation          (69,960)          (33,920)      Total          632,820          588,300         Liabilities and Stockholders' Equity     Accounts payable            41,340            49,820 Bonds payable          159,000          212,000 Common stock ($1 par)          228,960          184,440 Retained earnings          203,520          142,040      Total          632,820          588,300 Additional information: Net income for 2008 was $109,180. Cash dividends of $47,700 were declared and paid. Bonds payable amounting to $53,000 were redeemed for cash $53,000. Common stock was issued for $44,520 cash. No equipment was sold during 2008. Instructions: Prepare a statement of cash flows for 2008 using the indirect method. Comparative Balance Sheets For period Ending Dec. 31 Assets 2008 2007 Cash            77,380            23,320 Accounts receivable            90,100            80,560 Inventories          180,200          200,340 Land            79,500          106,000 Equipment          275,600          212,000 Accumulated depreciation          (69,960)          (33,920)      Total          632,820          588,300         Liabilities and Stockholders' Equity     Accounts payable            41,340            49,820 Bonds payable          159,000          212,000 Common stock ($1 par)          228,960          184,440 Retained earnings          203,520          142,040      Total          632,820          588,300 Additional information: Net income for 2008 was $109,180. Cash dividends of $47,700 were declared and paid. Bonds payable amounting to $53,000 were redeemed for cash $53,000. Common stock was issued for $44,520 cash. No equipment was sold during 2008. Instructions: Prepare a statement of cash flows for 2008 using the indirect method.

Explanation / Answer

Cash flow Statement Particulars Amount $ Amount $ Cash flow from operating activities Net Income               109,180 Add: Non cost effect on operating income Depreciation Expense                 36,040 Increase in Accounts receivable                 (9,540) Decrease in Inventory                 20,140 Decrease in Accounts Payable                 (8,480)                 38,160 Net cash provided by operating activities               147,340 Cash flow from investing activities sale of Land                 26,500 Purchase of Equipment              (63,600) Net cash provided by investing activities               (37,100) Cash flow from financing activities Proceeds from issuing stock                 44,520 Dividend              (47,700) Bonds redeemed              (53,000) Net cash provided by financing activities               (56,180) Net increase/ (decrease in cash)                 54,060 Opening cash balance                 23,320 Closing cash Balance                 77,380

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.