PROBLEM - Condensed financial data of Fulton Corp. for 2008 and 2007 are presented below.
FULTON CORP. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2008 AND 2007
2008 2007
Cash $800 $600
Investments 0 200
Receivables 2,250 2,100
Inventory 1,600 1,200
Plant assets 1,600 1,200
Accumulated depreciation (600) (455)
$5,650 $4,845
Accounts payable $750 $1,200
Accrued liabilities 330 520
Bonds payable 800 1,000
Capital stock 1,500 1,400
Retained earnings 2,270 725
$5,650 $4,845
FULTON COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2008
Sales $15,200
Cost of goods sold 10,400
Gross profit 4,800
Selling and administrative expenses 1,205
Income from operations 3,595
Other revenues and gains
Loss on sale of investments _ 50
Income before income tax 3,545
Income tax expense 1,400
Net income 2,145
Cash dividends 600
Income retained in business $1,545
Additional information:
During the year, $100 of common stock was issued in exchange for land. No plant assets were sold in 2008.
Instructions - Prepare a statement of cash flows using the direct method.