2 cash dividends of 9000 were declared and paid in 2014 3

Comparative statement of financial position

2014 2013

Assets

Land 18,000 40,000

Equipment 70,000 60,000

Accumulated depreciation (20,000) (13,000)

Prepaid insurance 25,000 17,000

Accounts receivable (net) 80,000 60,000

Cash 36,000 31,000

Total Assets $209,000 $195,000

Equity and Liabilities

Share capital-ordinary $140,000 $115,000

Retained earnings 31,000 55,000

Bonds payable 27,000 19,000

Accounts payable 11,000 6,000

Total equity and liabilities $209,000 $195,000

Additional information:

1. Net loss for 2014 is $15,000.

2. Cash dividends of $9,000 were declared and paid in 2014.

3. Land was sold for cash at a loss of $7,000. This was the only land transaction during the year.

4. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash.

5. $12,000 of bonds were retired during the year at carrying (book) value.

6. Equipment was acquired for ordinary shares. The fair value of the shares at the time of the exchange was $25,000.

Instructions

Prepare a statement of cash flows for the year ended 2014, using the indirect method.

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Accounting Basics: 2 cash dividends of 9000 were declared and paid in 2014 3
Reference No:- TGS01399429

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