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statement of cash flows_06Jan

Category: Accounting

1.) Prepare a statement of cash flows using the indirect method for the year ending December 31, 2011.

Balance Sheet

2011 2010
Cash $ 18,000 $25,000
Supplies 10,000 12,000
Accounts receivable (net) 31,000 35,000
Inventory 51,000 52,000
Prepaid expenses 9,000 3,000
Buildings, and equipment 400,000 360,000
Less: accumulated depreciation (100,000) (75,000)
Total assets $419,000 $412,000
Accounts payable $18,000 $13,000
Accrued expenses 10,000 8,500
Note payable, Short Term 20,000 60,000
Note payable, Long Term 20,000 15,500
Capital stock 296,000 280,000
Retained earnings 55,000 35,000
Total liabilities and equities $419,000 $412,000

Additional data:

One piece of equipment was purchased during the year.

Short term debt was repaid while long term debt was issued.

Dividends were paid during the year.

A condensed income statement for the year is as follows:

Sales 470,000
Cost of goods sold 220,000
Gross profit 250,000
Depreciation expense 25,000
Operating expenses, other 138,000
Operating income 87,000
Interest Expense (2,000)
Net income