On the basis of the following data for Grant Co. for 2011 and the preceding year ended December 31, 2010, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were net income of $56,000 and cash dividends declared of $18,000.
| |
Year
|
Year
|
| |
2011
|
2010
|
|
Cash
|
$90,000
|
$ 78,000
|
|
Accounts receivable (net)
|
78,000
|
85,000
|
|
Inventories
|
106,500
|
90,000
|
|
Equipment
|
410,000
|
370,000
|
|
Accumulated depreciation
|
(150,000)
|
(158,000)
|
| |
$534,500
|
$465,000
|
| |
|
|
|
Accounts payable (merchandise creditors)
|
$ 53,500
|
$ 55,000
|
|
Cash dividends payable
|
5,000
|
4,000
|
|
Common stock, $10 par
|
200,000
|
170,000
|
|
Paid-in capital in excess of par--
|
|
|
|
common stock
|
62,000
|
60,000
|
|
Retained earnings
|
214,000
|
176,000
|
| |
$534,500
|
$465,000
|