Edwards, Inc. has prepared the following comparative balance sheets
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. Edwards, Inc. has prepared the following comparative balance sheets
for 2003 and 2004:
2004 2003
?????????? ????????
Cash $ 198,000 $102,000
Receivables 106,000 78,000
Inventory 100,000 120,000
Prepaid expenses 12,000 18,000
Plant assets 840,000 700,000
Accumulated depreciation (300,000) (250,000)
Patent 102,000 116,000
?????????? ????????
$1,058,000 $884,000
Accounts payable $ 102,000 $112,000
Accrued liabilities 40,000 28,000
Mortgage payable ??? 300,000
Preferred stock 350,000 ???
Additional paid-in capital??preferred 80,000 ???
Common stock 400,000 400,000
Retained earnings 86,000 44,000
?????????? ????????
$1,058,000 $884,000
1. The Accumulated Depreciation account has been credited only for
the depreciation expense for the period.
2. The Retained Earnings account has been charged for dividends of
$92,000 and credited for the net income for the year.
The income statement for 2004 is as follows:
Sales $1,320,000
Cost of sales 726,000
??????????
Gross profit 594,000
Operating expenses 460,000
??????????
Net income $ 134,000
INSTRUCTIONS
(a) From the information above, prepare a statement of cash flows
(indirect method) for Edwards, Inc. for the year ended
December 31, 2004.
(b) From the information above, prepare a schedule of cash provided
by operating activities using the direct method.
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Solution Summary
The solution prepares a comparative balance sheet for Edwards, Inc.
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