Statement of Cash Flow

Worth 45 points

Prepare the Statement of Cash Flow using the indirect method format

Umlauf Company

Balance Sheets

December 31, 2007 and 2008

Assets

Cash 2007 $23925

Accounts receivables 2007 $34,125 2008 $39,825

Merchandise inventory 2007 $156,000 2008 $146,475

Prepaid expenses 2007 $3,600 2008 $1,650

Equipment 2007 $135,825 2008 $146,700

Accumulated Depreciation-Equipment 2007 (47,550) 2008 (61,950)

Patent 2007 $100,000 2008 $87,500

Total Assets 2007 $405,925 2008 $360,200

Liabilities and Equity

Accounts Payable 2007 $28,800 2008 $33,750

Income taxes payable 2007 $5,100 2008 $4,425

Dividends payable 2007 $4,500 2008 $0

Bonds payable 2007 $137,500 2008 $0

Common stock, $10 par 2007 $168750 2008 $203250

Paid in excess of par 2007 $0 2008 79,750

Retained earnings 2007 $61275 2008 $49,600

Treasury stock 2007 $0 2008 ($6000)

Total liabilities and equity 2007 $405,925 2008 $364,775

Umlauf Company

Income Statement

For year Ended December 31, 2008

Sales $446,100

Cost of goods sold $222,300

Other operating expenses $120,300

Patent amortization $12,500

Depreciation expense $25,500 = ($380,600) $446,100 380600 =$65,500

Other gains(losses)

Gain on sale of equipment $3,300

Gain on Retirement of bonds $825= $4,125

Income before taxes $6500-$4125= $69,625

Income tax expense ($13,725)

Net icome $55,900

Additional Information

a. Equipment costing $21,375 with accumulated depreciation of $11,100 is sold for cash.

b. Company issued 950 shares at $15 in FY 2008.

c. All sales are made on credit.

d. All merchandise inventory purchases are on credit.

e. Account payable balances result from merchandise inventory purchases.

f. All purchases of Long Term Assets are for cash

g. 2,500 shares of common stockwere issued at 40 in exchange for the bonds payables.

h. Company purchase 400 of its common stock for $15.00 per share