SHOW WORK!!!!!
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December 31 |
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2012 |
2011 |
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Cash |
$33,500 |
$13,000 |
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Accounts receivable |
12,250 |
10,000 |
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Inventory |
12,000 |
9,000 |
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Investments |
0 |
3,000 |
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Building |
0 |
29,750 |
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Equipment |
45,000 |
20,000 |
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Patent |
5,000 |
6,250 |
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Totals |
$107,750 |
$91,000 |
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Allowance for doubtful accounts |
$3,000 |
$4,500 |
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Accumulated depreciation on equipment |
2,000 |
4,500 |
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Accumulated depreciation on building |
0 |
6,000 |
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Accounts payable |
5,000 |
3,000 |
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Dividends payable |
0 |
5,000 |
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Notes payable, short-term (nontrade) |
3,000 |
4,000 |
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Long-term notes payable |
31,000 |
25,000 |
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Common stock |
43,000 |
33,000 |
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Retained earnings |
20,750 |
6,000 |
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Totals |
$107,750 |
$91,000 |
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| Additional data related to 2012 are as follows: |
| 1. Equipment that had cost |
$11,000 |
and was |
40% |
depreciated at time of |
| disposal was sold for |
$2,500 |
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| 2. |
$10,000 |
of the long-term note payable was paid by issuing common stock. |
| 3. Cash dividends paid were |
$5,000 |
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4. On January 1, 2010, the building was completely destroyed by a flood. Insurance proceeds on the
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| building were |
$30,000 |
(net of |
$2,000 |
taxes). |
| 5. Investments (available-for-sale) were sold at |
$1,700 |
above their cost. The |
| company has made similar sales and investments in the past. |
| 6. Cash of was paid for the acquisition of equipment. |
| 7. A long-term note for |
$16,000 |
was issued for the acquisition of equipment. |
| 8. Interest of |
$2,000 |
and income taxes of |
$6,500 |
were paid in cash. |
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| Instructions: |
| Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country. |
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