The 2024 income statement and comparative balance sheet of Rolling Hills, Inc. follow:

Additionally, Rolling Hills purchased land of $21,100 by financing it 100% with long-term notes payable during 2024. During the year, there were no sales of land, no retirements of stock, and no treasury stock transactions. A plant asset was disposed of for $0. The cost and the accumulated depreciation of the disposed asset was $13,410. The plant acquisition was for cash.

Requirements
1. Prepare the 2024 statement of cash flows, formatting operating activities by the indirect method.
2. How will what you learned in this problem help you evaluate an investment?

Transcribed Image Text:

Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses: Salaries Expense ROLLING HILLS, INC. Income Statement Year Ended December 31, 2024 Depreciation Expense--Plant Assets Other Operating Expenses Total Operating Expenses Operating Income Other Income and (Expenses): Interest Revenue Interest Expense Total Other Income and (Expenses) Net Income Before Income Taxes Income Tax Expense Net Income $ 77,400 14,400 10,200 8,700 (21,100) $ 440,000 209,200 230,800 102,000 128,800 (12,400) 116,400 20,000 $ 96,400