Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need help preparing a statement of cash flows using thr indirect method. There is a balance sheet and outline also attached The Murdock Corporation (MC)

Need help preparing a statement of cash flows using thr indirect method. There is a balance sheet and outline also attached
image text in transcribed
image text in transcribed
image text in transcribed
The Murdock Corporation (MC) reported the following balance sheet data for 2022 and 2021: Additional information for 2022: (1.) Sold available-for-sale debt securities costing $69,500 for $74,000. (2.) Equipment costing $20,000 with a book value of $5,000 was sold for $6,000. (3.) Issued 6% bonds payable at face value, $200,000. (4.) Purchased new equipment for $145,000 cash. (5.) Paid cash dividends of $20,000. (6.) Net income was $50,000. Required: Use the indirect method to prepare a statement of cash flows (SCF) for 2022. In addition, \begin{tabular}{|c|c|c|c|} \hline 1 & \multicolumn{3}{|c|}{ Murdock Corporation } \\ \hline 2 & \multicolumn{3}{|c|}{ Balance Sheet } \\ \hline 3 & \multicolumn{3}{|c|}{ For the year ended 12/31/2022} \\ \hline 4 & & 2022 & 2021 \\ \hline 5 & & & \\ \hline 6 & Cash & $77,375 & $22,955 \\ \hline 7 & Available-for-sale debt securities & & \\ \hline 8 & (not cash equivalents) & 15,500 & 85,000 \\ \hline 9 & Accounts receivable & 80,000 & 68,250 \\ \hline 10 & Inventory & 170,000 & 145,000 \\ \hline 11 & Prepaid insurance & 1,500 & 2,000 \\ \hline 12 & Land, buildings, and equipment & 1,250,000 & 1,125,000 \\ \hline 13 & Accumulated depreciation & (610,000) & (572,000) \\ \hline 14 & Total assets & $984,375 & $876,205 \\ \hline 15 & Accounts payable & $81,340 & $148,670 \\ \hline 16 & Salaries payable & 20,000 & 24,500 \\ \hline 17 & Notes payable (current) & 25,000 & 75,000 \\ \hline 18 & Bonds payable & 200,000 & 0 \\ \hline 9 & Common stock & 300,000 & 300,000 \\ \hline 10 & Retained earnings & 358,035 & 328,035 \\ \hline & Total liabilities and shareholders' equity & $984,375 & $876,205 \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline Cash flows from operating activities: & & \\ \hline Net income & & \\ \hline Adjustments for noncash effects: & & \\ \hline 1) Depreciation expense & (4,500) & \\ \hline 2) Gain on salc of available-for-sale debt securities & & \\ \hline 3) Gain on sale of equipment & & \\ \hline Changes in operating assets and liabilities: & & \\ \hline 1) & & \\ \hline 2) & & \\ \hline 3) & & \\ \hline 4) & & \\ \hline 5) & & \\ \hline Net cash flows from operating activities & & \\ \hline Cash flows from investing activities: & & \\ \hline 1) & & \\ \hline 2) & & \\ \hline 3) & & \\ \hline Net cash flows from investing activities & & \\ \hline & & \\ \hline Cash flows from financing activities: & & \\ \hline 1) & & \\ \hline 2) & & \\ \hline 3) & & \\ \hline Net cash flows from financing activities & & \\ \hline Cash balance, January 1 & & \\ \hline \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Business Reporting For Decision Making

Authors: Jacqueline Birt, Keryn Chalmers, Suzanne Maloney, Albie Brooks, Judy Oliver

6th Edition

978-0730363415, 0730363414

More Books

Students also viewed these Accounting questions

Question

6.7 Discuss strategies for recruiting a more diverse workforce.

Answered: 1 week ago