2. The comparative balance sheets for Gallup Company appear below:
Comparative Balance Sheet
Dec. 31, 2010 Dec. 31, 2009
Cash $ 28,000 $13,000
Accounts receivable 18,000 14,000
Prepaid expenses 7,000 9,000
Inventory 25,000 15,000
Long-term investments -0- 18,000
Equipment 60,000 30,000
Accumulated depreciationâ?"equipment (18,000) (14,000)
Total assets $120,000 $85,000
Liabilities and Stockholders' Equity
Accounts payable $ 25,000 $ 7,000
Bonds payable 37,000 45,000
Common stock 40,000 23,000
Retained earnings 18,000 10,000
Total liabilities and stockholders' equity $120,000 $85,000
1. Net income for the year ending December 31, 2010, was $25,000.
2. Cash dividends of $17,000 were declared and paid during the year.
3. Long-term investments that had a book value of $18,000 were sold for $16,000.
4. Sales for 2010 are $120,000.
1. Prepare a statement of cash flows for the year ended December 31, 2010, using the indirect method.
This posting formulates a statement of cash flows.
Statement of Cash Flows: Time for change! SFAS No. 95
See attached file.
As contained in the Week Four electronic reserve readings article readings, this article, Broome, O. W. (2004, March/April). Statement of cash flows: Time for change! Financial Analysts Journal, 60(2), 16. , describes the current SFAS No. 95 requirements for the statement of cash flows, cites recent cases of abuse and disinformation involving the statement, and makes significant recommendations for improving the statement. Based on the comments in the article do you think the three sections of the statement of cash flows provide enough information for the reader? Of the three which provides the most information or is this an 'it depends' answer?View Full Posting Details