(SCF—Indirect Method and Balance Sheet) Jobim Inc., had the following condensed balance sheet at the end of operations for 2007.

During 2008 the following occurred. 1. A tract of land was purchased for $9,000. 2. Bonds payable in the amount of $15,000 were retired at par. 3. An additional $10,000 in capital stock was issued at par. 4. Dividends totaling $9,375 were paid to stockholders. 5. Net income was $35,250 after allowing depreciation of $13,500. 6. Land was purchased through the issuance of $22,500 in bonds. 7. Jobim Inc. sold part of its investment portfolio for $12,875. This transaction resulted in a gain of $2,000 for the company. The company classifies the investments as available-for-sale. 8. Both current assets (other than cash) and current liabilities remained at the same amount.

Instructions

(a) Prepare a statement of cash flows for 2008 using the indirect method.

(b) Prepare the condensed balance sheet for Jobim Inc. as it would appear at December 31, 2008.

Transcribed Image Text:

Cash Current assets other than cash Investments Plant assets (net) Land JOBIM INC. BALANCE SHEET DECEMBER 31, 2007 $ 8,500 Current liabilities $ 15,000 29,000 Long-term notes payable 25,500 20,000 Bonds payable 25,000 67,500 Capital stock 75,000 40,000 Retained earnings 24,500 $165,000 $165,000