Share
Explore BrainMass

Statement of Cash Flows using Indirect Method Balance Sheet

Assets February 28 January 31

Cash $42,000 $37,000
Accounts receivable 64,000 53,000
Merchandise Inventory 81,000 94,000

Total current assets $187,000 $184,000

Plant and equipment:
Production equipment 166,000 152,000
Less: Accumulated depreciation (24,000) (21,000)

Total assets 329,000 315,000

Liabilities

Short-term debt 44,000 44,000
Accounts payable 37,000 41,000
Other accrued liabilities 21,000 24,000

Total current liablities 102,000 109,000
Long term debt 33,000 46,000
Total liabilities $135,000 155,000

Owner's Equity
Common stock,no par value 40,000
shares authorized, 30,000 and 28,000
shares issued, respectively $104,000 96,000

Retained earnings
Beginning balance 64,000 43,000
Net income for month 36,000 29,000
Dividends (10,000) (8,000)

Ending balance $90,000 $64,000

Total owner's equity $194,000 $160,000

Total liablities and owoner's equity $329,000 $315,000

Solution Preview

See the attached file.
Cash flow statement is in three parts - Cash from Operating Activity, Investing and Financing Activity. Operating activity consists of Net ...

Solution Summary

The solution explains the preparation of the statement of cash flows using the indirect method

$2.19