The balance sheets for Plasma Screens Corporation, along with additional information, are provided below: PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets: Cash $ 146,750 $ 159,000 Accounts receivable 76,000 89,500 Inventory 90,000 75,500 Prepaid rent 3,000 1,500 Long-term assets: Land 455,000 455,000 Equipment 750,000 645,000 Accumulated depreciation (415,000 ) (258,000 ) Total assets $ 1,105,750 $ 1,167,500 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 94,000 $ 80,500 Interest payable 6,750 13,500 Income tax payable 7,000 4,500 Long-term liabilities: Notes payable 112,500 225,000 Stockholders' equity: Common stock 675,000 675,000 Retained earnings 210,500 169,000 Total liabilities and stockholders' equity $ 1,105,750 $ 1,167,500 Additional Information for 2021: Net income is $64,000. The company purchases $105,000 in equipment. Depreciation expense is $157,000. The company repays $112,500 in notes payable. The company declares and pays a cash dividend of $22,500. Required: Prepare the statement of cash flows using the indirect method.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 103.4C

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The balance sheets for Plasma Screens Corporation, along with additional information, are provided below:

PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020
	2021		2020
Assets
Current assets:
Cash	$	146,750		$	159,000
Accounts receivable		76,000			89,500
Inventory		90,000			75,500
Prepaid rent		3,000			1,500
Long-term assets:
Land		455,000			455,000
Equipment		750,000			645,000
Accumulated depreciation		(415,000	)		(258,000	)
Total assets	$	1,105,750		$	1,167,500
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	94,000		$	80,500
Interest payable		6,750			13,500
Income tax payable		7,000			4,500
Long-term liabilities:
Notes payable		112,500			225,000
Stockholders' equity:
Common stock		675,000			675,000
Retained earnings		210,500			169,000
Total liabilities and stockholders' equity	$	1,105,750		$	1,167,500

Additional Information for 2021:

Net income is $64,000.
The company purchases $105,000 in equipment.
Depreciation expense is $157,000.
The company repays $112,500 in notes payable.
The company declares and pays a cash dividend of $22,500.

Required:
Prepare the statement of cash flows using the indirect method.

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