Assignment:
On the basis of the following data for Teller Co. for 2008 and the preceding year ended December 31, 2008, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000; was purchased for cash, and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.
Year 2007 2008
Cash $78,000 $100,000
Accounts Receivable (net) $85,000 $78,000
Inventories $90,000 $101,500
Equipment $370,000 $410,000
Accumulated Depreciation ($158,000) ($150,000)
Total $465,000 $539,500
Accounts Payable $55,000 $58,500
(Merchandise Creditors)
Cash Dividends Payable $4,000 $5,000
Common Stock, $10 Par $170,000 $170,000
Paid-in Capital in Excess of $60,000 $62,000
Par Common Stock
Retained Earnings $176,000 $214,000
Total $465,000 $539,500
Provide complete and step by step solution for the question and show calculations and use formulas.