Task: Condensed financial data of Turner Inc. follow.
TURNER INC.
Comparative Balance Sheets
December 31
Assets 2010 2009
Cash $ 37,000 $ 33,000
Accounts receivable 57,000 41,000
Inventories 45,000 48,000
Prepaid expenses 17,000 14,000
Investments 162,000 130,000
Plant assets 580,000 520,000
Accumulated depreciation (211,000) (180,000)
Total $687,000 $606,000
Liabilities and Stockholders' Equity
Accounts payable $ 44,000 $ 51,000
Accrued expenses payable 21,000 15,000
Bonds payable 180,000 220,000
Common stock 175,000 150,000
Retained earnings 267,000 170,000
Total $687,000 $606,000
Prepare a statement of cash
flows-indirect method.
TURNER INC.
Income Statement Data
For the Year Ended December 31, 2010
Sales $610,000
Less:
Cost of goods sold $290,000
Operating expenses, excluding
depreciation 65,000
Depreciation expense 50,000
Income taxes 47,000
Interest expense 12,000
Loss on sale of plant assets 9,000 473,000
Net income $137,000
Additional information:
1. New plant assets costing $90,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $30,000 were sold for $2,000 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of $40,000 was declared and paid during the year.
Instructions:
Prepare a statement of cash flows using the indirect method.
Data for Turner Inc. are presented. Further analysis reveals that accounts payable pertain to merchandise creditors.
Instructions: Prepare a statement of cash flows for Turner Inc. using the direct method.