PROBLEM
ABC Corporation accountants have assembled the following data for the year ended December 31, 2007.
REQUIRED:
Prepare ABC Corporation's statement of cash flows using the indirect method. Include an accompanying schedule of noncash investing and financing activities.
12/31/07 12/31/06
Current Accounts:
Current assets:
Cash and cash equivalents $85,000 $22,000
Accounts receivable 69,200 64,200
Inventories 80,000 83,000
Current liabilities:
Accounts payable $57,800 $55,800
Income tax payable 14,700 16,700
Transaction data for 2007:
Net income $ 57,000 Purchase of treasury stock $14,000
Issuance of common stock for cash 41,000 Loss on sale of equipment 11,000
Depreciation expense 21,000 Payment of cash dividends 18,000
Purchase of building 125,000 Issuance of long-term note
Retirement of bonds payable by payable to borrow cash 34,000
issuing common stock 65,000 Sale of equipment 58,000