Problem: Prepare statement of cash flows (indirect method) using balance sheet data. Presented below are comparative balance sheets for Branco, Inc., at January 31 and February 28, 2004
BRANCO, INC.
Balance Sheets
February 28 and January 31, 2004
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February 28, 2004
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January 31, 2004
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Assets
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Cash
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$52,000
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$30,000
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Accounts receivable
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40,000
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53,000
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Merchandise inventory
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85,000
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94,000
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Total current assets
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$177,000
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$177,000
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Plant and equipment:
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Production equipment
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166,000
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152,000
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Less: Accumulated depreciation
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(30,000)
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(21,000)
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Total assets
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$313,000
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$308,000
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Liabilities
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Short-term debt
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$54,000
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$44,000
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Accounts payable
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41,000
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41,000
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Other accrued liabilities
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24,000
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24,000
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Total current liabilities
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$119,000
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$109,000
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Long-term debt
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27,000
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39,000
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Total liabilities
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$146,000
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$148,000
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Owners' Equity
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Common stock, no par value, 40,000 shares authorized,
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30,000 and 28,000 shares issued, respectively
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$104,000
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$96,000
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Retained earnings:
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Beginning balance
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$64,000
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$43,000
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Net income for month
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9,000
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29,000
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Dividends
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(10,000)
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(8,000)
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Ending balance
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$63,000
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$64,000
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Total owners' equity
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$167,000
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$160,000
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Total liabilities and owners' equity
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$ 313,000
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$ 308,000
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Needed: Prepare a statement of cash flows using the indirect method