E12-24 (Algo) (Supplement C) Preparing a Statement of Cash Flows, Indirect Method: T-Account Method

GolfGear & More, Inc., is a regional and online golf equipment retailer. The company reported the following for the current year:

Purchased a long-term investment for cash, $21,600.

Paid cash dividend, $13,100.

Sold equipment for $11,500 cash (cost, $32,000, accumulated depreciation, $20,500).

Issued shares of no-par stock, 400 shares at $12 per share cash.

Net income was $25,700.

Depreciation expense was $4,100.

Its comparative balance sheet is presented below.

	Balances 12/31/Current Year			Balances 12/31/Prior Year
Cash		21,300			24,900
Accounts receivable		33,000			33,000
Merchandise inventory		81,600			73,500
Investments		21,600			0
Equipment		88,000			120,000
Accumulated depreciation		(16,700	)		(33,100	)
Total		228,800			218,300
Accounts payable	$	15,100		$	22,500
Wages payable		2,600			4,700
Income taxes payable		6,700			4,100
Notes payable		65,000			65,000
Common stock and additional paid-in capital		104,800			100,000
Retained earnings		34,600			22,000
Total	$	228,800		$	218,300

Required:

1. Complete a T-account worksheet.

Operating Cash

Investing

Financing

2. Based on the T-account worksheet, prepare the statement of cash flows for the current year in proper format. (List cash outflows as negative amounts.)

Golfgear & More Inc.,

Statement of cash Flows

For the year ended December 31,Cureent Year

Cash flows from operating activities

Changes in current assets and current liabilities

Cash flows from investing activities

CAsh flow from financing activities