The three accounts shown below and on page 626 appear in the general ledger of Cesar Corp. during 2007.
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Equipment
|
|
Date
|
|
Debit
|
Credit
|
Balance
|
|
Jan.1
|
Balance
|
|
|
160,000
|
|
July 31
|
Purchase of equipment
|
70,000
|
|
230,000
|
|
Sept. 2
|
Cost of equipment constructed
|
53,000
|
|
283,000
|
|
Nov. 10
|
Cost of equipment sold
|
|
49,000
|
234,000
|
|
|
|
|
|
|
|
Accumulated Depreciation- Equipment
|
|
Date
|
|
Debit
|
Credit
|
Balance
|
|
Jan. 1
|
Balance
|
|
|
71,000
|
|
Nov. 10
|
Accumulated depreciation on equipment sold
|
30,000
|
|
41,000
|
|
Dec. 31
|
Depreciation for year
|
|
28,000
|
69,000
|
|
|
|
|
|
|
|
Retained Earnings
|
|
Date
|
|
Debit
|
Credit
|
Balance
|
|
Jan. 1
|
Balance
|
|
|
105,000
|
|
Aug. 23
|
Dividends (cash)
|
14,000
|
|
91,000
|
|
Dec. 31
|
Net income
|
|
67,000
|
158,000
|
Instructions
From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on sale of equipment was $5,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.)
P*12-5A Grania Company's income statement contained the condensed information below.
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GRANIA COMPANY
Income Statement
For the Year Ended December 31, 2007
|
|
Revenues
|
|
$970,000
|
|
Operating expenses, excluding depreciation
|
$624,000
|
|
|
Depreciation expense
|
60,000
|
|
|
Loss on sale of equipment
|
16,000
|
700,000
|
|
Income before income taxes
|
|
270,000
|
|
Income tax expense
|
|
40,000
|
|
Net income
|
|
$230,000
|
Grania's balance sheet contained the comparative data at December 31, shown on page 630.
|
|
2007
|
2006
|
|
Accounts receivable
|
$75,000
|
$60,000
|
|
Accounts payable
|
41,000
|
28,000
|
|
Income taxes payable
|
11,000
|
7,000
|
Accounts payable pertain to operating expenses.
Instructions
Prepare the operating activities section of the statement of cash flows using the indirect method.
*P12-6A Data for Grania Company are presented in P12-5A.
Instructions
Prepare the operating activities section of the statement of cash flows using the direct method.