Prepare a statement of cash flows using the indirect method


The comparative balance sheet of Oak and Tile Flooring Co. for June 30, 2008 and 2007, is as follows:

 

June 30, 2008

June 30, 2007

Assets

 

 

Cash

$ 34,700

$ 23,500

Accounts receivable (net)

101,600

92,300

Inventories

146,300

142,100

Investments

0

50,000

Land

145,000

0

Equipment

215,000

175,500

Accumulated depreciation

(48,600)

(41,300)

 

$594,000

$442,100

Liabilities and Stockholders' Equity

 

 

Accounts payable (merchandise creditors)

$100,900

$ 95,200

Accrued expenses (operating expenses)

15,000

13,200

Dividends payable

12,500

10,000

Common stock, $1 par

56,000

50,000

Paid-in capital in excess of par-common stock

220,000

100,000

Retained earnings

189,600

173,700

 

$594,000

$442,100

The following additional information was taken from the records of Oak and Tile Flooring Co.:

a. Equipment and land were acquired for cash.

b. There were no disposals of equipment during the year.

c. The investments were sold for $45,000 cash.

d. The common stock was issued for cash.

e. There was a $65,900 credit to Retained Earnings for net income.

f. There was a $50,000 debit to Retained Earnings for cash dividends declared.

Instructions

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

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Managerial Accounting: Prepare a statement of cash flows using the indirect method
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