Question
Problem 21. The Sage Corporation prepared, for 2012 and 2011, the following balance sheet data: 2012 2011 Cash $87,375 $63,750 Available-for-sale securities(not cash Equivalents) $17,250
Problem 21. The Sage Corporation prepared, for 2012 and 2011, the following balance sheet data:
| 2012 | 2011 |
---|---|---|
Cash | $87,375 | $63,750 |
Available-for-sale securities(not cash Equivalents) | $17,250 | $105,000 |
Accounts Receivable | $90,000 | $86,250 |
Merchanddise Inventory | $187,500 | $163,500 |
Prepaid Insurance | $1,125 | $1,500 |
Land, Buildings, and equipment | $1,378,875 | $1,087,500 |
Accumulated Depreciation | $(558,750) | $(498,750) |
Total | $1,203,375 | $1,008,750 |
Accounts Payable | $ 153,375 | $ 236,250 |
Salaries Payable | 18,750 | 26,250 |
Notes Payable-- bank (current) | 37,500 | 150,000 |
Bonds Payable | 375,000 | 0 |
Common Stock | 600,000 | 600,000 |
Retained Earnings (deficit) | 18,750 | (3,750) |
Total | $1,203,375 | $1,008,750 |
Additional Information:
(a) Sold available-for-sale securities (not cash equivalents) costing $87,750 for $90,000.
(b) Equipment costing $18,750 with a book value of $3,750 was sold for $4,500.
(c) Issued 8% bonds payable at par, $375,000.
(d) Purchased new equipment for cash, $310,125.
(e) Paid cash dividends of $22,500 during the year.
(f) Net income for 1999 was $45,000.
(g) Proceeds from the notes payable were used for operating purposes.
Prepare a cash flow statement for Sage Corporation for 2012, using the indirect method. To save time use this format :
Sage Corporation
Statement of Cash Flows
For the Year Ended December 31,2012
Cash flows from operating activities:
Net income $
Adjustments:
Gain on sale of available-for-sale securities
Gain on sale of equipment
Depreciation expense
Increase in accounts receivable
Increase in merchandise inventory
Decrease in prepaid insurance
Decrease in accounts payable
Decrease in salaries payable
Decrease in notes payable
Net cash used in operating activities
---------
Cash flows from investing activities:
Sale of available-for-sale securities
Sale of equipment
Purchase of equipment
Net cash used in investing activites
Cash flows from financing activities:
Proceeds from bond issue
Payment of cash dividends
Net cash provided by financing activities
Net increase in cash
Cash at beginning of year
Cash at end of year $
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