REYNOLDS COMPANY Comparative Balance Sheets December 31 RW Assets Cash Accounts receivable Inventories Prepaid expenses Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Totals 2005 54,000 68,000 54,000 4,000 45,000 200,000 (21,000) 193,000 -(28,000) $569,000 2004 $ 37,000 26,000 0- 6,000 70,000 200,000 (11,000) 68,000 (10,000) $386,000 Change Increase/Decreas $ 17,000 Increase 42,000 Increase 54,000 Increase 2,000 Decrease 25,000 Decrease -0-- 10,000 Increase 125,000 Increase 18,000 Increase Llabilities and Stockholders' Equity Accounts payable Accrued expenses payable Bonds payable Common stock ($1 par)- Retained earnings- Totals $ 23,000 10,000 -H10,000 220,000 206,000 $ 40,000 -0- 150,000 60,000 136,000 $386,000 $ 17,000 Decrease 10,000 Increase 40,000 Decrease 160,000 Increase 70,000 Increase $569,000 34 CHAPTER 13 Statement of Cash Flows REYNOLDS COMPANY Income Statement For the Year Ended December 31, 2005 5 Revenues $890,000 Cost of goods sold $465,000 Operating expenses 221,000 Interest expense 12,000 Loss on sale of equipment 2,000 700,000 Income before income taxes 190,000 Income tax expense 65,000 Net income $125,000 - Additional information: 1. Operating expenses include depreciation expense of $33,000 and charges from pre- paid expenses of $2,000. 2. Land was sold at its book value for cash. 3. Cash dividends of $55,000 were declared and paid in 2006. 4. Interest expense of $12,000 was paid in cash 5. Equipment with a cost of $166,000 was purchased for cash. Equipment with a cost of $41,000 and a book value of $36,000 was sold for $34,000 cashout 6. Bonds of $10,000 were redeemed at their book value for dash. Bonds of $30,000 were converted into.common stock. 7. Common stock ($1 par) of $130,000 was issued for cash. 8. Accounts payable pertain to merchandise suppliers. INDIC equired be Prepare statement of Cash Flows for Dec 31 by wsing indirect methed. 120055