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P12-5 (Supplement B) Preparing a Statement of Cash Flows with Gain on Sale of Equipment (Indirect Method) LO12-2, 12-4, 12-6 XS Supply Company is developing
P12-5 (Supplement B) Preparing a Statement of Cash Flows with Gain on Sale of Equipment (Indirect Method) LO12-2, 12-4, 12-6 | |||||
XS Supply Company is developing its annual financial statements at December 31, 2014. The statements are complete except for the | |||||
statement of cash flows. The completed comparative balance sheets and income statement are summarized: | |||||
2014 | 2013 | ||||
Balance sheet at December 31 | |||||
Cash | $ 34,000 | $ 29,000 | |||
Accounts receivable | 35,000 | 28,000 | |||
Merchandise inventory | 41,000 | 38,000 | |||
Property and equipment | 121,000 | 100,000 | |||
Less: Accumulated depreciation | (30,000) | (25,000) | |||
$ 201,000 | $ 170,000 | ||||
Accounts payable | $ 36,000 | $ 27,000 | |||
Wages payable | 1,200 | 1,400 | |||
Note payable, long-term | 38,000 | 44,000 | |||
Contributed capital | 88,600 | 72,600 | |||
Retained earnings | 37,200 | 25,000 | |||
$ 201,000 | $ 170,000 | ||||
Income statement for 2014 | |||||
Sales | $ 120,000 | ||||
Gain on sale of equipment | 1,000 | ||||
Cost of goods sold | 70,000 | ||||
Other expenses | 38,800 | ||||
Net income | $ 12,200 | ||||
Additional Data: | |||||
a. | Bought equipment for cash, $31,000. | ||||
Sold equipment with original cost of $10,000, accumulated depreciation of $7,000, for $4,000 cash. | |||||
b. | Paid $6,000 on the long-term note payable. | ||||
c. | Issued new shares of stock for $16,000 cash. | ||||
d. | No dividends were declared or paid. | ||||
e. | Other expenses included depreciation, $12,000; wages, $13,000; taxes, $6,000; and other, $7,800. | ||||
f. | Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, | ||||
assume that these expenses were fully paid in cash. | |||||
Required: | |||||
1 | Prepare the statement of cash flows for the year ended December 31, 2014, using the indirect method. | ||||
(List cash outflows as negative amounts.) | |||||
Possible input areas are shaded. | |||||
XS SUPPLY COMPANY | |||||
Statement of Cash Flows | |||||
For the Year Ended December 31, 2014 | |||||
Cash flows from operating activities: | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
- | |||||
Net cash provided by operating activities | - | ||||
Cash flows from investing activities: | |||||
- | |||||
Cash flows from financing activities: | |||||
- | |||||
$ - | |||||
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