Condensed financial data of Codgers Inc. follow. ODGERS INC. Comparative Balance

Question

Condensed financial data of Codgers Inc. follow. ODGERS INC. Comparative Balance Sheet December 31 Assets 2014 2013 Cash $ 184,224 $ 110,352 Accounts receivable 200,184 86,640 Inventory 256,500 234,498 Prepaid expenses 64,752 59,280 Long-term investments 314,640 248,520 Plant assets 649,800 552,900 Accumulated depreciation (114,000) (118,560) Total $ 1,556,100 $ 1, 173,630 Liabilities and Stockholders Equity Accounts payable 4 232,560 $ 153,444 Accrued expenses payable 37,620 47,880 Bonds payable 250,800 332,880 common stock 501,600 399,000 Retained earnings 533,520 240,426 Total $ 1,556,100 $ 1,173,630 ODGERS INC. Income Statement Data For the Year Ended December 31, 2014 Sales revenue $ 885,689 Less: Cost of goods sold $ 308,849 Operating expenses, excluding depreciation 28, 295 Depreciation expense 106,020 Income tax expense 62,198 Interest expense 10, 784 Loss on disposal of plant assets 17,100 533,246 Net income $ 352, 443 additional information: New plan assets costing $ 228,000 were purchased for cash during the year. Old plant assets having an original cost of $ 131, 100 and accumulated depreciation of $ 110.580 were sold for $ 3,420 cash. Bonds payable matured and were paid off at face value for cash. A cash dividend of $ 59,349 was declared and paid during the year. Prepare a statement of cash flows using the indirect method.

Explanation / Answer

Cash Flow Statement A) Cash from Operating Activities Net Profit for the year 352443 Add: Depreciation expense 106020 Add: Loss on disposal of plant 17100 Operating profit before working capital changes 475563 Less: Increase in accounts receivable -113544 Less: Increase in Inventory -22002 Less: Increase in Prepaid expenses -5472 Less: Decrease in Accrued expenses payable -10260 Add: Increase in Accounts Payable 79116 Cash flow from Operating Activities 403401 B) Cash from Investing Activities Sale of plant 3420 Plant purchased -228000 Less: Purchase of long-term investment -66120 Cash used in Investing Activities -290700 C) Cash from Financing Activities Issue of common stock 102600 Bonds repaid -82080 Dividend paid -59349 Cash used in Financing Activities -38829 Net change in cash and its equivalents (A+B+C) 73872 Add: Opening balance of Cash 110352 Closing balance of cash 184224

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