Use the Goldman Medical Supplies data from P11-37B. The cash amounts for Interest Revenue, Salary Expense, Interest Expense, and Income Tax Expense are the same as the accrual amounts for these items.

Requirements

1. Prepare the 2010 statement of cash flows by the direct method.

2. How will what you learned in this problem help you evaluate an investment in Goldman Medical Supplies?

11-37

The 2010 comparative balance sheet and income statement of Goldman Medical Supplies, follow:

Goldman Medical Supplies had no noncash investing and financing transactions during 2010. During the year, Goldman Medical Supplies made no sales of land or equipment, no issuance of notes payable, no retirement of stock, and no treasury stock transactions.

Transcribed Image Text:

Goldman Medical Supplies Comparative Balance Sheet December 31, 2010 and 2009 2010 2009 INCREASE (DECREASE) Current Assets: Cash and Cash Equivalents $ 6,700 $ 5,400 $ 1,300 Accounts Receivable Inventory 25,200 26,800 (1,600) 91,500 89,600 1,900 Plant Assets: Land 89,200 60,300 28,900 Equipment, Net 53,200 49,200 4,000 Total Assets $265,800 $231,300 $34,500 Current Liabilities: Accounts Payable Accrued Liabilities Long-Term Liabilities: Notes Payable Stockholders' Equity: $ 30,200 $ 35,400 $ (5,200) 30,400 28,100 2,300 72,000 100,000 (28,000) Common Stock 88,900 64,700 24,200 Retained Earnings 44,300 3,100 41,200 Total Liabilities and Stockholders' Equity $265,800 $231,300 $ 34,500