PREPARING A STATEMENT OF CASH FLOWS Volusia Company reported the following comparative balance sheets for 2009: 2009

Question:

PREPARING A STATEMENT OF CASH FLOWS Volusia Company reported the following comparative balance sheets for 2009:

2009 2008 Assets:

Cash $ 28,100 $ 18,000 Accounts receivable 26,500 32,000 Inventory 24,100 28,200 Prepaid rent 3,900 1,800 Long-term investments 37,200 25,500 Property, plant, and equipment 115,000 102,000 Accumulated depreciation (47,100) (38,600)

Total assets $187,700 $168,900 Liabilities and Equity:

Accounts payable $ 24,900 $ 21,200 Interest payable 4,700 3,300 Wages payable 4,600 6,900 Income taxes payable 3,500 5,200 Notes payable 35,000 30,000 Common stock 72,900 65,000 Retained earnings 42,100 37,300 Total liabilities and equity $187,700 $168,900 Additional information:

. Net income for 2009 was $15,300.

. Cash dividends of $10,500 were declared and paid during 2009.

. Long-term investments with a cost of $18,000 were sold for cash at a loss of

$1,500. Additional long-term investments were purchased for $29,700 cash.

. Equipment with a cost of $20,000 and accumulated depreciation of $16,300 was sold for $4,500 cash. New equipment was purchased for $33,000 cash.

. Depreciation expense was $24,800.

. A principal payment of $8,000 was made on long-term notes. Volusia issued notes payable for $13,000 cash.

. Common stock was sold for $7,900 cash.

Required:
Prepare a statement of cash flows for Volusia, using the indirect method to compute net cash flow from operating activities.

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Cornerstones Of Financial Accounting Current Trends Update

ISBN: 9781111527952

1st Edition

Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen

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