Damocles Company manufacture fine swords. Below arelisted the net changes in the company's balance sheet accounts for the past year:
|
Debits |
Credits |
| Cash |
$51,000 |
|
| Accounts Receivable |
170,000 |
|
| Inventory |
|
$63,000 |
| Prepaid Expenses |
4,000 |
|
| Long-Term Loans to Subsidiaries |
|
80,000 |
| Long-Term Invesments |
90,000 |
|
| Plant and Equipment |
340,000 |
|
| Accumulated Depreciation |
|
65,000 |
| Accounts Payable |
|
48,000 |
| Accrued Liablilites |
5,000 |
|
| Bonds Payable |
|
200,000 |
| Deferred Income Taxes |
|
9,000 |
| Preferred Stock |
180,000 |
|
| Common Stock |
|
300,000 |
| Retained Earnings |
|
75,000 |
|
840,000 |
840,000 |
The following addtional information is available about lastyear's activities: a. Net income for the year was $85,000b. The company sold equipment during the year for $35,000. The equipment originally cost the company $160,000, and it had $145,000 in accumulated depreciation at the time of sale. c. The company declared and paid $10,000 in cash dividendsduring the year. d. Depreciation charges for the year were $_?_ e. The opening and closing balances in the Plant and Equipment and Accumulated Depreciation accounts are given below:
|
Opening |
Closing |
| Plant and Equipment |
$2,850,000 |
$3,190,000 |
| Accumulated Depreciation |
$975,000 |
$1,040,000 |
f. There were no stock conversions (i.e., one class of stock converted to another class) during the year. g. The balance in the Cash account at the beginning of the year was $190,000; the balance at the end of the year was $_?_h If data are not given explaining the change in an account, make the most reasonable assumption as to the cause of the change.
Required: Using the indirect method, prepare a statement ofcash flows for the year.