Preparing a Complete Statement of Cash Flows
The following are financial statements for Germaine Company:
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Germaine Company
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Comparative Balance Sheet
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December 31, 2008 and 2007
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(Dollars in thousands)
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2008
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2007
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Assets
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Cash
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$22
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$16
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Accounts receivable
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225
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245
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Inventory
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105
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125
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Prepaid general expenses
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21
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12
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Plant assets
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1,025
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1,000
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Accumulated depreciation-plant assets
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(530)
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(585)
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Total assets
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$ 868
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$ 813
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Liabilities and Stockholders' Equity
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Accounts payable
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$70
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$45
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Interest payable
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15
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12
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Income taxes payable
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80
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77
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Bonds payable
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105
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97
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Common stock
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362
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354
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Retained earnings
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236
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228
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Total liabilities and stockholders' equity
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$ 868
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$ 813
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Germaine Company
Condensed Income Statement
For the Year Ended December 31, 2008
(Dollars in thousands)
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Sales
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$1,450
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Cost of goods sold
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990
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Gross profit
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$460
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Operating expenses:
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Depreciation expense
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$55
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General expenses
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340
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Interest expense
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12
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Income tax expense
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15
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422
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Net income
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$38
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The following information is also available for 2008:
(a) Plant assets were sold for their book value of $180 during the year. The assets had an original cost of $290.
(b) Cash dividends totaling $30 were paid during the year.
(c) All accounts payable relate to inventory purchases.
(d) All purchases of plant assets were cash transactions.