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Problem 14-21A (Algo) Using financial statements to prepare a statement of cash flows-direct method LO 14-2, 14-3, 14-4 The following financial statements were drawn from
Problem 14-21A (Algo) Using financial statements to prepare a statement of cash flows-direct method LO 14-2, 14-3, 14-4
The following financial statements were drawn from the records of Perez Shoes:
Balance Sheets As of December 31 | |||||||
Year 2 | Year 1 | ||||||
Assets | |||||||
Cash | $ | 116,449 | $ | 25,490 | |||
Accounts receivable | 56,801 | 65,770 | |||||
Merchandise inventory | 130,885 | 118,420 | |||||
Notes receivable | 0 | 31,200 | |||||
Equipment | 145,200 | 250,400 | |||||
Accumulated depreciationequipment | (72,636 | ) | (137,990 | ) | |||
Land | 84,500 | 54,000 | |||||
Total assets | $ | 461,199 | $ | 407,290 | |||
Liabilities | |||||||
Accounts payable | $ | 39,917 | $ | 46,190 | |||
Salaries payable | 33,288 | 26,630 | |||||
Utilities payable | 649 | 1,298 | |||||
Interest payable | 0 | 2,480 | |||||
Notes payable (long-term) | 0 | 64,500 | |||||
Common stock | 294,800 | 239,800 | |||||
Retained earnings | 92,545 | 26,392 | |||||
Total liabilities and equity | $ | 461,199 | $ | 407,290 | |||
Income Statement For the Year Ended December 31, Year 2 | |||
Sales revenue | $ | 584,540 | |
Cost of goods sold | (290,253 | ) | |
Gross margin | 294,287 | ||
Operating expenses | |||
Salaries expense | (181,790 | ) | |
Depreciation expense | (15,086 | ) | |
Utilities expense | (11,510 | ) | |
Operating income | 85,901 | ||
Nonoperating items | |||
Interest expense | (2,558 | ) | |
Loss on the sale of equipment | (2,110 | ) | |
Net income | $ | 81,233 | |
Additional Information
-
Sold equipment costing $105,200 with accumulated depreciation of $80,440 for $22,650 cash.
-
Paid a $15,080 cash dividend to owners.
Required:
Analyze the data and prepare a statement of cash flows using the direct method. (Amounts to be deducted and cash outflows should be indicated by a minus sign.)
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