On the basis of the following data for Nader Co. for 2008 and the preceding year ended December 31, 2008, prepare a statement of cashflows. Use the indirect method of reporting cash flows fromoperating activities. Assume that equipment costing $125,000was purchased for cash and equipment costing $85,000 withaccumulated depreciation of $65,000 was sold for $15,000; that thestock was issued for cash; and that the only entries in theretained earnings account were net income of $51,000 and cash dividends declared of $13,000.
| Year |
Year |
| 2008 |
2007 |
| 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 |
$465,000 |
|
| 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 |