Problem:
(Preparation of a Statement of Cash Flows and a Balance Sheet) Grant Wood Corporation’s balance sheet at the end of 2006 included the following items.
|
Current assets
|
$235,000
|
|
Land
|
30,000
|
|
Building
|
120,000
|
|
Equipment
|
90,000
|
|
Accum.depr.-building
|
(30,000)
|
|
Accum.depr.-equipment
|
(11,000)
|
|
Patents
|
40,000
|
|
Total
|
$474,000
|
|
Current liabilities
|
$150,000
|
|
Bonds payable
|
100,000
|
|
Common stock
|
44,000
|
|
Total
|
$474,000
|
The following information is available for 2007
1. net income was $55,000
2. equipment (cost $20,000 and accumulated depreciation $8,000) was sold for $10,000
3. depreciation expense was $4,000 on the building and $9,000 on equipment
4. patent amortization was $2,500
5. current assets other than cash increased by $29,000. Current liabilities increased by $13,000
6. an addition to the building was completed at a cost of $27,000
7. a long-term investment in stock was purchased for $16,000
8. bonds payable of $50,000 were issued
9. cash dividends of $30,000 were declared and paid
10. treasury stock was purchased at a cost of $11,000
Instructions:
(Show only totals for current assets and current liabilities)
a. Prepare a statement of cash flows for 2007
b. Prepare a balance sheet at December 31, 2007