Question
Rayon Company has the following balance sheets and income statements: 2022 2021 Cash $15,000 $10,000 Receivables 6,000 10,000 Inventories 17,000 18,000 Equipment 33,000 40,000 Accumulated
Rayon Company has the following balance sheets and income statements:
2022 | 2021 | ||||
Cash | $15,000 | $10,000 | |||
Receivables | 6,000 | 10,000 | |||
Inventories | 17,000 | 18,000 | |||
Equipment | 33,000 | 40,000 | |||
Accumulated Depreciation | -8,000 | -10,000 | |||
$63,000 | $68,000 |
Accounts Payable | $10,000 | $15,000 | |||
Capital Stock | 20,000 | 16,000 | |||
Retained Earnings | 33,000 | 37,000 | |||
$63,000 | $68,000 |
Sales | $110,000 | ||||
Cost of Sales | 72,000 | ||||
Loss on sale of Assets | -2,000 | ||||
Expenses | 16,000 | 90,000 | |||
Income | $20,000 |
Depreciation expense for the year was $5,000. Equipment costing $15,000 and having a book value of $8,000 was sold at a loss. Other equipment was purchased during the year, stock was issued for $4,000, and a dividend was paid.
In proper format, prepare using the indirect method a cash flow statement for 2022. To accomplish this, use the T account worksheet to the right of the financial statements and conduct the T account indirect method. When completed, prepare in proper format, the cash flow statement.
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