Response to the following problem:
On the basis of the following data for Larson Co. for the year ending December 31, 2012 and the preceding year ending December 31,2011 prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. In addition to the balance sheet, assume that:
-Equipment costing $125,000 was purchased for cash.
-Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000.
-The stock was issued for cash.
-The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.
2012 2012
Cash 100,000 78,000
Accounts Receivable (net) 78,000 85,000
Inventories 101,500 90,000
Equipment 410,000 370,000
Accumulated Depreciation (150,000) (158,000)
$539,500 $465,500
Accounts Payable(merchandise creditors 58,500 55,000
Cash dividends Payable 5,000 4,000
Common stock, $10 par 200,000 170,000
Paid-In capital in excess
of par common stock 62,000 60,000
Retained earnings 214,000 176,000
$539,500 $465,000