Odessa Company uses the indirect method to prepare its statement of cash flows.  Please refer to the following information extracted from the comparative balance sheet for the company. 20182017Increase/(decrease)Accounts payable$35,000$52,000($17,000)Accrued liabilities18,00010,000$8,000Long-term notes payable168,000180,000($12,000)    Total liabilities$221,000$242,000($21,000)    Common stock100,00061,000$39,000Retained earnings226,000148,000$78,000Treasury stock(18,500)(12,400)($6,100)     Total equity$307,500$196,600$110,900    Total liabilities and equity$528,500$438,600$89,900  Additional information provided:Dividend paid for 2018 amounted to $12,500.Net income for 2018 was $98,000During 2018, the company repaid $80,000 of long-term notes payable.During 2018, the company borrowed $68,000 on a new note payableThere were no stock retirements during 2018.                Requirement:Using the indirect method, prepare a schedule for the financing section (only) of the statement of cash flows for December 2018.

Question
Asked Nov 15, 2019
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Odessa Company uses the indirect method to prepare its statement of cash flows.  Please refer to the following information extracted from the comparative balance sheet for the company.

 

2018

2017

Increase/(decrease)

Accounts payable

$35,000

$52,000

($17,000)

Accrued liabilities

18,000

10,000

$8,000

Long-term notes payable

168,000

180,000

($12,000)

    Total liabilities

$221,000

$242,000

($21,000)

       

Common stock

100,000

61,000

$39,000

Retained earnings

226,000

148,000

$78,000

Treasury stock

(18,500)

(12,400)

($6,100)

     Total equity

$307,500

$196,600

$110,900

       

Total liabilities and equity

$528,500

$438,600

$89,900

 

 

Additional information provided:

  • Dividend paid for 2018 amounted to $12,500.
  • Net income for 2018 was $98,000
  • During 2018, the company repaid $80,000 of long-term notes payable.
  • During 2018, the company borrowed $68,000 on a new note payable
  • There were no stock retirements during 2018.

               

 

Requirement:

Using the indirect method, prepare a schedule for the financing section (only) of the statement of cash flows for December 2018.

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Expert Answer

Step 1

Statement of cash flows:

This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period. Statement of cash flows includes the changes in cash balance due to operating, investing, and financing activities. Oper...

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