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Hi, I need to know the formulas that I should use to answer the question attached
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Sophos, Inc. prepared a B/S at Dec. 31, 2004. Cash A/R Inv LT investments Land Plant and equipment (net) Total assets $ 50,000 27,000 80,000 10,000 32,000 91,000 $290,000 A/P $ 17,000 Taxes payable 3,000 Bonds Payable 100,000 C/S 75,000 R/E 95,000 Total liabilities and SE $290,000 The following occurred during 2005. 1. $25,000 in cash and a $35,000 note payable were exchanged for land valued at $60,000. 2. Bonds payable (maturing 2009) in the amount of $20,000 were retired by paying $18,000 cash. 3. Common shares in the amount of $50,000 were issued. 4. The company sold surplus equipment, with a book-value of $14,000 for $18,000. 5. Net income was $31,000 6. Cash dividends of $2,500 were paid. 7. 100 C/S (considered short-term investments) were purchased for $8,300. (Hint: treat it as CFI) 8. A new building was acquired through the issuance of $50,000 in bonds. 9. $8,000 of depreciation was recorded on the plant and equipment. 10. At Dec. 31, 2005, Cash was $87,200. A/R had a balance of $30,000, Inv had increased to $82,000 and A/P had fallen to $12,000. LT investments and Taxes payable were unchanged from 2004. Required: (a). Prepare a statement of cash flows for 2005 using the indirect method. (10 marks) (b). Prepare a B/S for Sophos, Inc at Dec. 31, 2005.(10 marks)
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