Preparing a Statement of Cash Flows
The following are comparative balance sheets for the Paulino Corporation for 2000 and 1999 and the income statement for the year ended December 31, 2000:
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Paulino Corporation
Comparative Balance Sheets
December 31
|
|
Assets
|
2000
|
1999
|
|
Cash
|
$ 89,000
|
$ 60,000
|
|
Accounts receivable
|
65,000
|
50,000
|
|
Inventory
|
200,000
|
90,000
|
|
Land
|
100,000
|
225,000
|
|
Equipment, net
|
371,000
|
380,000
|
|
$825,000
|
$805,000
|
|
Liabilities and Shareholders' Equity
|
|
Accounts payable
|
54,000
|
32,000
|
|
Dividends payable
|
15,000
|
0
|
|
Interest payable
|
6,000
|
8,000
|
|
Mortgage payable
|
130,000
|
305,000
|
|
Invested Capital
|
capital280,000
|
280,000
|
|
Retained earnings
|
340,000
|
180,000
|
|
$825,000
|
$805,000
|
|
Paulino Corporation
Income Statement
For the Year Ended December 31, 2000
|
|
Sales
|
|
$1,200,000
|
|
Cost of goods sold
|
|
(720,000)
|
|
Gross profit
|
|
480,000
|
|
Operating and other expenses
|
|
Depreciation
|
(9,000)
|
|
|
Other operating expenses
|
(275,000)
|
|
|
Gain on sale of land
|
15,000
|
|
|
Interest expense
|
(10,000)
|
(279,000)
|
|
Net income
|
$ 201,000
|
Additional Information:
1. Dividends declared during the year were $41,000.
2. Land at a cost of $125,000 was sold for $140,000.
3. The only change in equipment was the depreciation expense.
4. All other balance sheet account changes are from normal transactions.
Required
Use the direct method to prepare a statement of cash flows for Paulino Corporation.