Question:
Use the spreadsheet provided to do this assignment. Kite Corporation, a merchandiser, currently completed its calendar-year 2011 operations.
For the current year, (1) all sales are credit sales, (2) each credit to Accounts Receivable reflect cash receipts from customers, (3) every purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are originally debited to Prepaid Expenses.
The company's balance sheets and income statement follow.
Additional Information on Year 2011 Transactions:
1. The loss on the cash sale of equipment was $2,100.
2. Sold equipment costing $51,000, with accumulated depreciation of $20,850, for $28,050 cash.
3. Purchased equipment costing $113,250 by paying $38,250 cash and signing a long-term note payable for the balance.
4. Borrowed $6,000 cash by signing a short-term note payable.
5. Paid $45,000 cash to reduce the long-term notes payable.
6. Issued 3,000 shares of common stock for $11 cash per share.
7. Declared and paid cash dividends of $63,000.
Required:
1. Use the Excel spreadsheet to prepare a complete statement of cash flows; report its operating activities using the indirect method.
2. Disclose some noncash investing and financing activities in a note.