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    Statement of Cash flows for Teller Co.

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    On the basis of the following data for Teller Co. for 2008 and the preceding year ended December 31, 2008, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000; was purchased for cash, and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.

    Year 2007 2008
    Cash $78,000 $100,000
    Accounts Receivable (net) $85,000 $78,000
    Inventories $90,000 $101,500
    Equipment $370,000 $410,000
    Accumulated Depreciation ($158,000) ($150,000)
    Total $465,000 $539,500

    Accounts Payable $55,000 $58,500
    (Merchandise Creditors)
    Cash Dividends Payable $4,000 $5,000
    Common Stock, $10 Par $170,000 $170,000
    Paid-in Capital in Excess of $60,000 $62,000
    Par Common Stock
    Retained Earnings $176,000 $214,000
    Total $465,000 $539,500

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    Solution Preview

    Statement of Cash Flow (Indirect Method)
    For the year Ended December 31, 2008

    Net Income $51,000
    Adjustments to reconcile net income to net cash provided
    Add: Depreciation $57,000
    Changes in other ...

    Solution Summary

    The solution gives detailed steps on completing a statement of cash flows for Teller Co.