Condensed financial data of Oakley Company appear below.

Additional information:
1. Equipment costing $97,000 was purchased for cash during the year.
2. Investments were sold at cost.
3. Equipment costing $47,000 was sold for $15,550, resulting in gain of $8,750.
4. A cash dividend of $83,400 was declared and paid during the year.

Instructions
Prepare 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 each entry.

Transcribed Image Text:

Oakley Company Comparative Balance Sheets December 31 Assets 2020 2019 $ 47,250 $ 82,700 Cash Accounts receivable 90,800 126,900 57,000 Inventory 102,650 Investments 84,500 87,000 Equipment Accumulated depreciation-equipment 255,000 205,000 (49,500) (40,000) $590,400 $458,900 Liabilities and Stockholders’ Equity 2020 2019 $ 57,700 $ 48,280 Accounts payable Accrued expenses payable Bonds payable 12,100 18,830 70,000 100,000 250,000 170,600 Common stock 200,000 Retained earnings 121,790 $590,400 $458,900 Oakley Company Income Statement For the Year Ended December 31, 2020 Sales revenue $297,500 Gain on disposal of plant assets 8,750 306,250 Less: Cost of goods sold $99,460 Operating expenses (excluding depreciation expense) Depreciation expense Income tax expense Interest expense 14,670 49,700 7,270 2,940 174,040 Net income $132,210