Problem: The comparative balance sheet of True-Tread Flooring Co. for June 30, 2006 and 2005, is as follows:
___________________June 30, 2006_________June 30, 2005______
Assets
Cash $ 68,900 $ 53,700
Accounts receivable (net) $ 89,200 $ 85,400
Inventories $ 145,800 $ 132,700
Investments $ 0 $ 45,000
Land $ 105,500 $ 0
Equipment $ 210,800 $ 185,600
Accumulated depreciation $ (52,800) $ (45,100)
$ 567,400 $ 457,300
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Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors) $ 104,300 $ 100,200
Accrued expenses (operating expenses) $ 15,200 $ 14,300
Dividends payable $ 12,000 $ 10,000
Common stock, $11 par $ 55,000 $ 50,000
Paid-in capital in excess of par
- common stock $ 200,000 $ 100,000
Retained earnings $ 180,900 $ 182,800
$ 567,400 $ 457,300
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The following additional information was taken from the records of True-Tread
Flooring Co:
a. Equipment and land were acquired for cash.
b. There were no disposals of equipment during the year.
c. The investments were sold for $41,000 cash.
d. The common stock was issued for cash.
e. There was a $46,100 credit to Retained Earnings for net income.
f. There was a $48,000 debit to Retained Earnings for cash dividends declared.
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.