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    Biven Corporation Balance Sheets

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    1. Biven Corporation's balance sheet and income statement appear below:

    BALANCE SHEETS

    2006 2005
    ASSETS
    Cash & equivalents $35,000 $30,000
    Accounts receivable 54,000 49,000
    Inventory 67,000 58,000
    Plant & equipment 580,000 530,000
    Accumulated depreciation (316,000) (313,000)
    Total Assets $420,000 $354,000

    LIABILITIES & EQUITIES
    Accounts payable $51,000 $57,000
    Wages payable 26,000 24,000
    Taxes payable 11,000 10,000
    Deferred taxes payable 25,000 24,000
    Bonds payable (long term) 77,000 90,000
    Total liabilities 190,000 205,000
    Common stock 33,000 30,000
    Retained earnings 197,000 119,000
    Total equities 230,000 149,000
    Total liabilities & equities $420,000 $354,000

    INCOME STATEMENTS
    2006 2005
    Sales $620,000 $520,000
    Cost of goods sold 381,000 300,000
    Gross margin 239,000 220,000
    Selling & Admin expense 103,000 99,000
    Net operating income 136,000 121,000
    Gain on sale of plant & equipment 20,000 -
    Income before tax 156,000 121,000
    Income tax 47,000 36,000
    Net income $109,000 $85,000

    Cash dividends were $31,000. The company sold equipment for $20,000.
    The equipment had originally cost $14,000 and was fully depreciated.

    Required:
    Prepare a statement of cash flows for 2006 using the indirect and direct methods.

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    https://brainmass.com/business/accounting/359570

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    Solution Summary

    This solution is comprised of a detailed explanation to prepare a statement of cash flows for 2006 using the indirect and direct methods.

    $2.19

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