Problem: The comparative balance sheets for Kohl Company appear below:
KOHL COMPANY
Comparative Balance Sheet
|
Dec. 31, 2005 |
Dec. 31, 2004 |
| Assets |
|
|
| Cash |
$23,000 |
$12,000 |
| Accounts receivable |
18,000 |
14,000 |
| Prepaid expenses |
6,000 |
9,000 |
| Inventory |
27,000 |
18,000 |
| Land |
0 |
18000 |
| Equipment |
60,000 |
30,000 |
| Accumulated depreciation-equipment |
-18,000 |
-14,000 |
| Total assets |
$116,000 |
$87,000 |
|
|
|
| Liabilities and Stockholders' Equity |
|
|
| Accounts payable |
$21,000 |
$9,000 |
| Bonds payable |
37,000 |
45,000 |
| Common stock |
40,000 |
23,000 |
| Retained earnings |
18,000 |
10,000 |
| Total liabilities and stockholders' equity |
$116,000 |
$87,000 |
Additional information:
1 Net income for the year ending December 31, 2005 was $20,000.
2 Cash dividends of $12,000 were declared and paid during the year.
3 There was land that had a cost of $18,000 but was sold for $16,000.
Instructions:
Prepare a statement of cash flows for the year ended December 31, 2005, using the indirect method.