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Statement of cash flows

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Managerial accounting-statement of cash flows
SHORES INC.
Comparative Balance Sheet
December 31, Year 2, and Year 1

Yr. 2 Yr. 1
Assets
Cash $8 $18
Accounts receivable 355 233
Inventory 120 168
Prepaid expenses 12 5
Plant and equipment 612 475
Less accumulated depreciation (97) (88)
Long-term investments 17 22
Total assets $1,027 $833

Liabilities and Stockholders' Equity
Accounts payable $321 $225
Accrued liabilities 62 74
Bonds payable 288 174
Deferred income taxes 45 36
Common stock 205 254
Retained earnings 106 70
Total liabilities and stockholders' equity $1,027 $833

SHORES INC.
Income Statement
For the Year Ended December 31, Year 2

Sales $805
Cost of goods sold 502
Gross margin 303
Selling and administrative expenses 215
Net operating income 88
Nonoperating items:
Gain on sale of investments $7
Loss on sale of equipment 4 3
Income before taxes 91
Less income taxes 24
Net income $67

Equipment cost $20
Equipment sale 10
Accumulated depreciation on equipment 6
Long-term investment purchase 5
Long-term investment sale 12
Cash dividends 31

Check figure:
(1) Net cash provided by operating
activities $91

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The solution explains how to prepare a statement of cash flows for Shores Inc

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