Condensed financial data of Oprah Company appear below.

Additional information:1. New plant assets costing $92,000 were purchased for cash during the year.2. Investments were sold at cost.3. Plant assets costing $47,000 were sold for $15,550, resulting in gain of $8,750.4. A cash dividend of $83,400 was declared and paid during the year.InstructionsPrepare a worksheet for the statement of cash flows using the indirect method. Enter the reconciling items directly in the worksheet columns, using letters to cross-reference eachentry.

Transcribed Image Text:

OPRAH COMPANY Comparative Balance Sheets December 31 2009 Assets 2010 $ 92,700 $ 47,250 57,000 Cash Accounts receivable 90,800 Inventories 121,900 102,650 Investments 84,500 250,000 87,000 205,000 Plant assets Accumulated depreciation (49,500) (40,000) $590,400 $458,900 Liabilities and Stockholders' Equity $ 57,700 12,100 100,000 $ 48,280 18,830 Accounts payable Accrued expenses payable Bonds payable Common stock 70,000 250,000 200,000 Retained earnings 121,790 170,600 $590,400 $458,900 OPRAH COMPANY Income Statement For the Year Ended December 31, 2010 Sales $297,500 8,750 Gain on sale of plant assets 306,250 Less: Cost of goods sold Operating expenses (excluding depreciation expense) Depreciation expense $99,460 14,670 49,700 7,270 2,940 Income taxes Interest expense 174,040 Net income $132,210