Problem: Prepare statement of cash flows -indirect method
The comparative balance sheets at January 31 and February 28, 2004
Balance Sheets
February 28 and January 31, 2004
|
|
|
|
|
|
February 28, 2004
|
|
January 31, 2004
|
|
Assets
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
$42,000
|
|
$30,000
|
|
Accounts receivable
|
|
|
36,000
|
|
53,000
|
|
Merchandise inventory
|
|
|
81,000
|
|
94,000
|
|
Total current assets
|
|
|
$159,000
|
|
$177,000
|
|
Plant and equipment:
|
|
|
|
|
|
|
Production equipment
|
|
|
166,000
|
|
152,000
|
|
Less: Accumulated depreciation
|
|
(30,000)
|
|
(21,000)
|
|
Total assets
|
|
|
|
$295,000
|
|
$308,000
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
|
$54,000
|
|
$44,000
|
|
Accounts payable
|
|
|
37,000
|
|
41,000
|
|
Other accrued liabilities
|
|
|
14,000
|
|
24,000
|
|
Total current liabilities
|
|
|
$105,000
|
|
$109,000
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
27,000
|
|
39,000
|
|
Total liabilities
|
|
|
|
$132,000
|
|
$148,000
|
|
Owners' Equity
|
|
|
|
|
|
|
|
Common stock, no par value, 40,000 shares authorized,
|
|
|
|
30,000 and 28,000 shares issued, respectively
|
$104,000
|
|
$96,000
|
|
Retained earnings:
|
|
|
|
|
|
|
Beginning balance
|
|
|
$64,000
|
|
$43,000
|
|
Net income for month
|
|
|
5,000
|
|
29,000
|
|
Dividends
|
|
|
|
(10,000)
|
|
(8,000)
|
|
Ending balance
|
|
|
|
$59,000
|
|
$64,000
|
|
Total owners' equity
|
|
|
$163,000
|
|
$160,000
|
|
Total liabilities and owners' equity
|
|
$ 295,000
|
|
$ 308,000
|
Required:
Prepare a statement of cash flows using the indirect method.