Dec. 31, 20Y8 Dec. 31, 20Y7 Assets $ 110,000 280,000 450,000 Cash ... $ 95,000 ..... Accounts recelvable (net) 260,000 Inventorles ... 520,000 Prepald expenses Equlpment....... Accumulated depreclation-equlpment. Total assets . 15,000 5,000 1,130,000 800,000 (235,000) $1,785,000 (190,000) $1,455,000 Liabilities and Stockholders' Equity $ 100,000 $ 75,000 500,000 Accounts payable (merchandise creditors) .. Mortgage note payable...... Common stock, $10 par... Pald-In capital in excess of par-common stock. Retalned earnings..... Total llabilitles and stockholders' equity.. .. 500,000 200,000 100,000 580,000 400,000 785,000 $1,785,000 $1,455,000 ...... ....

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Statement of cash flows-indirect method
The comparative balance sheet of Yellow Dog Enterprises Inc. at
December 31, 20Y8 and 20Y7, is as follows:

 

Additional data obtained from the income statement and from an
examination of the accounts in the ledger for 20Y8 are as follows:

a. Net income, $250,000.
b. Depreciation reported on the income statement, $135,000.
c. Equipment was purchased at a cost of $420,000 and fully
depreciated equipment costing $90,000 was discarded, with no salvage realized.
d. The mortgage note payable was not due for six years, but the
terms permitted earlier payment without penalty.
e. 30,000 shares of common stock were issued at $20 for cash.
f. Cash dividends declared and paid, $45,000.

Instructions
Prepare a statement of cash flows, using the indirect method of
presenting cash flows from operating activities.

Dec. 31, 20Y8 Dec. 31, 20Y7
Assets
$ 110,000
280,000
450,000
Cash ...
$ 95,000
.....
Accounts recelvable (net)
260,000
Inventorles ...
520,000
Prepald expenses
Equlpment.......
Accumulated depreclation-equlpment.
Total assets .
15,000
5,000
1,130,000
800,000
(235,000)
$1,785,000
(190,000)
$1,455,000
Liabilities and Stockholders' Equity
$ 100,000
$ 75,000
500,000
Accounts payable (merchandise creditors) ..
Mortgage note payable......
Common stock, $10 par...
Pald-In capital in excess of par-common stock.
Retalned earnings.....
Total llabilitles and stockholders' equity..
..
500,000
200,000
100,000
580,000
400,000
785,000
$1,785,000
$1,455,000
......
....
Transcribed Image Text:Dec. 31, 20Y8 Dec. 31, 20Y7 Assets $ 110,000 280,000 450,000 Cash ... $ 95,000 ..... Accounts recelvable (net) 260,000 Inventorles ... 520,000 Prepald expenses Equlpment....... Accumulated depreclation-equlpment. Total assets . 15,000 5,000 1,130,000 800,000 (235,000) $1,785,000 (190,000) $1,455,000 Liabilities and Stockholders' Equity $ 100,000 $ 75,000 500,000 Accounts payable (merchandise creditors) .. Mortgage note payable...... Common stock, $10 par... Pald-In capital in excess of par-common stock. Retalned earnings..... Total llabilitles and stockholders' equity.. .. 500,000 200,000 100,000 580,000 400,000 785,000 $1,785,000 $1,455,000 ...... ....
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