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    Statment of Cash Flows

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    I am unable to find a solution for the attached two problems. Please use attach excel and follow the instructions.
    Instructions:
    Prepare a statement of cash flows for Ernest Banks Co. for the year
    ended 12-31-06, using the indirect method.
    Net Cash provided by operating activities $28,0000
    Investing activities provided $2,500.

    The financial statements of Ernest Banks Company appear below.

    ERNEST BANKS COMPANY
    Comparative Balance Sheets
    31-Dec
    Assets 2006 2005
    Cash $   23,000  $   13,000 
    Accounts receivable 24,000  33,000 
    Merchandise inventory 20,000  27,000 
    Prepaid expenses 20,000  13,000 
    Land 40,000  40,000 
    Property, plant, and equipment 200,000  225,000 
    Less: Accumulated depreciation -50,000 -67,500
    Total $277,000  $283,500 

    Liabilities and Stockholders' Equity
    Accounts payable $   9,000  $   18,500 
    Accrued expenses payable 9,500  7,500 
    Interest payable 1,000  1,500 
    Income taxes payable 3,000  2,000 
    Bonds payable 50,000  80,000 
    Common stock 123,000  105,000 
    Retained earnings 81,500  69,000 
    Total $277,000  $283,500 

    ERNEST BANKS COMPANY
    Income Statement
    For the Year Ended December 31, 2006
    Revenues
    Sales $600,000
    Gain on sale of plant assets 2,500 $602,500
    Less: Expenses
    Cost of goods sold 500,000
    Operating expenses (excluding depreciation) 60,000
    Depreciation expense 7,500
    Interest expense 5,000
    Income tax expense 9,000 581,500
    Net income $   21,000

    Additional information:
    1.       Plant assets were sold at a sales price of $62,500.
    2.       Additional equipment was purchased at a cost of $60,000.
    3.       Dividends of $8,500 were paid.
    4.       All sales and purchases were on account.
    5.       Bonds were redeemed at face value.
    6.       Additional shares of stock were issued for cash.

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    https://brainmass.com/business/accounting/statment-of-cash-flows-153698

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    Solution Summary

    The solution explains how to prepare a statement of cash flows using the direct method and the indirect method for Ernest Banks Company

    $2.19

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