Statement of cash flows
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See attached Excel format of problem.
Please prepare a cashflow statement based upon the following information.
Assets
Cash $ 30,000 $15,000
Accounts receivable 18,000 14,000
Prepaid expenses 6,000 9,000
Inventory 35,000 15,000
Long-term investments-0- 18,000
Equipment 60,000 30,000
Accumulated depreciation - equipment (18,000) (14,000)
Total assets $120,000 $85,000
Liabilities and Stockholders' Equity
Accounts payable $ 28,000 $ 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
Additional information:
1. Net income for the year ending December 31, 2009, was $35,000.
2. Cash dividends of $23,500 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 2009 are $124,000.
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Solution Summary
The solution explains how to prepare a statement of cash flows. A cashflow statement based upon the information is prepared.
Solution Preview
Prepare a cash flow statement using the indirect method.
Comparative Balance Sheet
Dec. 31, 2009 Dec. 31, 2008
Assets
Cash 30,000 $15,000
Accounts receivable 18,000 14,000 -4,000
Prepaid expenses 6,000 9,000 3,000
Inventory 35,000 15,000 -20,000
Long-term investments -0- 18,000
Equipment 60,000 30,000
Accumulated depreciation—equipment -18,000 -14,000
Total assets $131,000 $87,000
Liabilities and Stockholders' Equity
Accounts payable $28,000 $7,000 $21,000
Bonds ...
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