prepare a statement of cash flows for 2014 using the indirect method 621081
Presented on the next page are the comparative balance sheets for Pester Company at December 31.
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PESTER COMPANY Comparative Balance Sheets December 31 |
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|
Assets |
2014 |
2013 |
|
Cash |
$ 41,000 |
$ 57,000 |
|
Accounts receivable |
77,000 |
64,000 |
|
Inventory |
172,000 |
140,000 |
|
Prepaid expenses |
12,140 |
16,540 |
|
Land |
110,000 |
150,000 |
|
Buildings |
250,000 |
250,000 |
|
Accumulated depreciation—buildings |
(70,000) |
(50,000) |
|
Equipment |
215,000 |
175,000 |
|
Accumulated depreciation—equipment |
(70,000) |
(42,000) |
|
Total |
$737,140 |
$760,540 |
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Liabilities and Stockholders” Equity |
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|
Accounts payable |
$ 58,000 |
$ 45,000 |
|
Bonds payable |
235,000 |
265,000 |
|
Common stock, $1 par |
280,000 |
250,000 |
|
Retained earnings |
164,140 |
200,540 |
|
Total |
$737,140 |
$760,540 |
Additional information:
- Operating expenses include depreciation expense $55,000 and charges from prepaid expenses of $4,400.
- Land was sold for cash at cost.
- Cash dividends of $84,290 were paid.
- Net income for 2014 was $47,890.
- Equipment was purchased for $80,000 cash. In addition, equipment costing $40,000 with a book value of $33,000 was sold for $37,000 cash.
- Bonds were converted at face value by issuing 30,000 shares of $1 par value common stock.
Instructions
Prepare a statement of cash flows for 2014 using the indirect method.