Bentley Corporation's balance sheet and income statement are as follow Bentley Corporation Comparative Balance Sheet Information Assets Cash ........ Accounts receivable. Merchandise inventory ....... Equipment Accumulated depreciation ............. Total assets... Liabilities and Equity Accounts payable Income taxes payable .... Common shares........ Retained earnings ...... Total liabilities and equity.... December 31 2011 2010 5 116,000 $ 78,000 62,000 54,000 406,000 356,000 222,000 198,000 (104.000) (68,000) 5618,000 5 702,000 $ 46,000 18,000 520,000 118,000 5 702,000 $ 64,000 16,000 480,000 58,000 $618,000 Bentley Corporation Income Statement For Year Ended December 31, 2011 Sales ........... 31,328,000 Cost of goods sold........ 796 000 Gross profit.................... 5 $32.000 Operating expenses: Depreciation expense................. $ 36,000 Other expenses... 334,000 Total operating expenses........... 370,000 Income from operations ................. $ 162,000 Income taxes ................ 28,000 Net income ......... $ 134,000 entley Corporation's activities during 2011: Additional information regarding Bentley Corporation's activities a Equipment is purchased for $24.000 cash 16000 common shares are issued for cash at $2.50 per she Declared and paid cash dividends during the year Pequired flows for 2011 that reports the cash inflows and outflows from operating activities according Prepare a statement of cash flows to the indirect method. 2011 2010 beginn H FLOW - using the INDIRECT METHOD PREPARING A STATEMENT OF CASH E Comparative financial information Calculate the Source $ change & (Inflow) determine if it is an Increase or Decrease (Outflow) Balancing or Reconciling + Der or Use Cash Accounts Receivables Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable 116,000 78.000 38,000 62.000 54.000 8,000 06, 356,00 So, 000 1222.000 198.000 24.000 (04,000) ( 68. 36.CO) 40.000 64.00 18.000 18.000 16.000 2.00 So,co 480.000 10. 118,000 58.000 60,000 Common Shares Retained Earnings asset USE asset SOURCE 1 liability or O/E SOURCE liability or O/E USE #1 Calculate the change in all accounts on the Balance Sheet #2 The Beginning and Ending Cash balances are transferred to the Cash Flow statement. #3 For all accounts other than cash, determine if the change is a source or use of cash or a reconciling figure. #4 Determine if the item will be reported in the Operating, Investing or Financing section of the Statement of Cash Flow. 45 Ensure that the change in each Balance Sheet account has been accounted for on the Cash Flow Statement. 116 Ensure that the Income Statement Accounts like Net Income. Depreciation Expense and any Gains or Losses have been accounted for in the Statement. #7 Complete the Statement of Cash flow and ensure that it balances (from Beginning to ending cash) Reconcile Accumulated Depreciation Deginning Balance, Accumulated Depreciation + Depreciation Expense 68. 36,000 - Accumulated Depreciation for PP&E that has been sold = Ending Balance, Accumulated Depreciation 107. Calculate Book Value of P.P. & Equipment Price Asset was sold This amount no Puree of war m erednis Stment section as reno equipmelk sold & E skip this part Priginal Cost of Equipment (Purchase Price) Accumulated Depreciation for PP&E that has been sold = Book Value GAIN (Sales Price > Book Value) LOSS (Sales Price
