Task: 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 |
| 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.