Question
11. The balance sheets for Braun Company, for the years ended December 31, 2015 and 2014, are as follows: 2015 2014 Cash $ 53,000 $
11. The balance sheets for Braun Company, for the years ended December 31, 2015 and 2014, are as follows:
| 2015 | 2014 |
Cash | $ 53,000 | $ 50,000 |
Accounts receivable (net) | 25,000 | 48,000 |
Inventories | 120,500 | 100,000 |
Investments | ..... | 70,000 |
Equipment | 573,200 | 450,000 |
Accumulated depreciation-equipment | (142,000) | (176,000) |
| $629,700 | $542,000 |
|
|
|
Accounts payable | $ 62,500 | $ 43,800 |
Bonds payable, due 2012 | ..... | 100,000 |
Common stock, $10 par | 325,000 | 285,000 |
Paid-in capital in excess of par-- |
|
|
common stock | 80,000 | 55,000 |
Retained earnings | 162,200 | 58,200 |
| $629,700 | $542,000 |
The income statement for the current year is as follows:
Sales |
| $625,700 |
Cost of merchandise sold |
| 340,000 |
Gross profit |
| $285,700 |
Operating expenses: |
|
|
Depreciation expense | $26,000 |
|
Other operating expenses | 68,000 | 94,000 |
Income from operations |
| $191,700 |
Other income: |
|
|
Gain on sale of investment | $ 4,000 |
|
Other expense: |
|
|
Interest expense | 6,000 | (2,000) |
Income before income tax |
| $189,700 |
Income tax |
| 60,700 |
Net income |
| $129,000 |
Additional information:
(a) | Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $183,200. |
(b) | Bonds payable for $100,000 were retired by payment at their face amount. |
(c) | 5,000 shares of common stock were issued at $13 for cash. |
(d) | Cash dividends declared and paid, $25,000. |
Required: Prepare a statement of cash flows, using the indirect method.
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