(SCF—Direct Method) Cleveland Company had available at the end of 2007 the information on page 126A

Instructions Prepare a statement of cash flows for Cleveland Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are available-for-sale securities.

Transcribed Image Text:

CLEVELAND COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2007 AND 2006 Cash Accounts receivable 2007 $ 15,000 17,500 2006 $ 4,000 12,950 Short-term investments Inventory Prepaid rent 20,000 30,000 42,000 35,000 3,000 12,000 Prepaid insurance 2.100 900 Office supplies 1,000 750 Land 125,000 175,000 Building 350,000 350,000 Accumulated depreciation (105,000) (87,500) Equipment 525,000 400,000 Accumulated depreciation (112,000) Patent Total assets Accounts payable Taxes payable Wages payable Short-term notes payable Long-term notes payable (130,000) 45,000 $910,600 $ 27,000 50,000 $871,100 $ 32,000 5,000 4,000 5,000 3,000 10,000 10,000 60,000 70,000 Bonds payable 400,000 400,000 Premium on bonds payable 20,303 25,853 Common stock 240,000 220,000 Paid-in capital in excess of par 20,000 17,500 Retained earnings 123,297 88,747 Total liabilities and stockholders' equity $910,600 $871,100