Question
Problem 5.Statement of cash flows (20 points) The balance sheets for Kinder Company showed the following information. Additional information concerning transactions and events during 2018
Problem 5.Statement of cash flows (20 points)
The balance sheets for Kinder Company showed the following information. Additional information concerning transactions and events during 2018 are presented below.
Kinder Company
Balance Sheet
December 31
20182017
Cash$30,900$10,200
Accounts receivable43,30020,300
Inventory35,00042,000
Available-for-sales debt investments015,000
Property, plant & equipment236,500150,000
Accumulated depreciation(37,700)(25,000)
$308,000$212,500
Accounts payable$17,000$26,500
Notes payable, short-term (nontrade, financing purpose)21,00017,000
Long-term notes payable70,00050,000
Common stock130,00090,000
Retained earnings70,00029,000
$308,000$212,500
Additional data:
1.Net income for the year 2018, $61,000.
2.Depreciation on plant assets for the year, $12,700.
3.Sold investments (available-for-sale) for $33,000 cash ($18,000 above cost). The cost of these investments was $15,000.
4.Paid cash dividends of $20,000.
5.The $86,500 increase in property, plant and equipment is due to acquisition of a new equipment. Kinder paid $26,500 in cash and issued $60,000 long-term note for the remaining amount. Kinder did not sell any plant assets during the year.
7. Paid a $40,000 long-term note payable by issuing common stock.
Instructions
Using the format provided on the next page, prepare statement of cash flows (using the indirect method) for 2018 for Kinder Company. Show related calculations.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started