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Exercise 11-10A Prepare a statement of cash flowsindirect method (LO11-3, 11-4, 11-5) The balance sheets for Plasma Screens Corporation, along with additional information, are provided
Exercise 11-10A Prepare a statement of cash flowsindirect method (LO11-3, 11-4, 11-5)
The balance sheets for Plasma Screens Corporation, along with additional information, are provided below:
PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 | ||||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 144,850 | $ | 156,500 | ||||
Accounts receivable | 76,400 | 90,000 | ||||||
Inventory | 91,000 | 76,400 | ||||||
Prepaid rent | 3,200 | 1,600 | ||||||
Long-term assets: | ||||||||
Land | 460,000 | 460,000 | ||||||
Equipment | 756,000 | 650,000 | ||||||
Accumulated depreciation | (418,000 | ) | (260,000 | ) | ||||
Total assets | $ | 1,113,450 | $ | 1,174,500 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 95,000 | $ | 81,400 | ||||
Interest payable | 6,750 | 13,500 | ||||||
Income tax payable | 7,200 | 4,600 | ||||||
Long-term liabilities: | ||||||||
Notes payable | 112,500 | 225,000 | ||||||
Stockholders' equity: | ||||||||
Common stock | 680,000 | 680,000 | ||||||
Retained earnings | 212,000 | 170,000 | ||||||
Total liabilities and stockholders' equity | $ | 1,113,450 | $ | 1,174,500 | ||||
Additional Information for 2021:
- Net income is $65,000.
- The company purchases $106,000 in equipment.
- Depreciation expense is $158,000.
- The company repays $112,500 in notes payable.
- The company declares and pays a cash dividend of $23,000.
Required: Prepare the statement of cash flows using the indirect method. (List cash outflows and any decrease in cash as negative amounts.)
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