Exercise 1- Gutierrez Company reported net income of $199,920 for 2014. Gutierrez also reported depreciation expense of $42,710 and a loss of $6,350 on the disposal of equipment. The comparative balance sheet shows a decrease in accounts receivable of $12,190 for the year, a $15,710 increase in accounts payable, and a $3,810 decrease in prepaid expenses.
Prepare the operating activities section of the statement of cash flows for 2014. Use the indirect method
Problem- Presented below are the financial statements of Nosker Company.
Additional data:
1. Dividends declared and paid were $29,590.
2. During the year equipment was sold for $8,270 cash. This equipment cost $17,920 originally and had a book value of $8,270 at the time of sale.
3. All depreciation expense, $15,920, is in the operating expenses.
4. All sales and purchases are on account.
Further analysis reveals the following.
1. Accounts payable pertain to merchandise suppliers.
2. All operating expenses except for depreciation were paid in cash.
(a) Prepare a statement of cash flows for Nosker Company using the direct method.