Statement of Cash Flows (indirect Method) Dair Company's income statement and comparative balance sheets follow. DAIR COMPANY Income Statement For Year Ended December 31,2011 Sales $ 700,000 Cost of goods sold $ 440,000 Wages and other operating expenses 95,000 Depreciation expense 21,000 Amortization expense 6,000 Interest expense 10,000 Income tax expense 36,000 Loss on bond retirement 5,000 613,000 Net income $87,000 DAIR COMPANY Balance Sheets Dec 31, 2011 Dec 31, 2010 Assets Cash $ 22,000 $ 18,000 Accounts receivable 54,000 48,000 Inventory 103,000 109,000 Prepaid expenses 12,000 10,000 Plant assets 360,000 336,000 Accumulated depreciation (86,000) (84,000) Intangible assets 44,000 50,000 Total assets $ 509,000 $ 487,000 Liabilities and Stockholders' Equity Accounts payable $ 31,000 $ 26,000 Interest payable 3.000 7,000 Income tax payable 6,000 8,000 Bonds payable 60,000 120,000 Common stock 252,000 228,000 Retained earnings 157.000 98,000 Total liabilities and equity $ 509,000 $ 487,000 During 2011, the company sold for $17,000 cash old equipment that had cost $36,000 and had $ 19,000 accumulated depreciation. Also in 2011, new equipment worth $60,000 was acquired in exchange for $60,000 of bonds payable, and bonds payable of $120,000 were retired for cash at a loss. A $28,000 cash dividend was declared and paid in 2011. Any stock issuances were for cash. (a) Compute the change in cash that occurred in 2011. Cash, December 31, 2011 $ Cash, December 31, 2010 Cash increase during 2011 $ Statement of Cash Flows (indirect Method) Dair Company's income statement and comparative balance sheets follow. DAIR COMPANY Income Statement For Year Ended December 31,2011 Sales $ 700,000 Cost of goods sold $ 440,000 Wages and other operating expenses 95,000 Depreciation expense 21,000 Amortization expense 6,000 Interest expense 10,000 Income tax expense 36,000 Loss on bond retirement 5,000 613,000 Net income $87,000 DAIR COMPANY Balance Sheets Dec 31, 2011 Dec 31, 2010 Assets Cash $ 22,000 $ 18,000 Accounts receivable 54,000 48,000 Inventory 103,000 109,000 Prepaid expenses 12,000 10,000 Plant assets 360,000 336,000 Accumulated depreciation (86,000) (84,000) Intangible assets 44,000 50,000 Total assets $ 509,000 $ 487,000 Liabilities and Stockholders' Equity Accounts payable $ 31,000 $ 26,000 Interest payable 3.000 7,000 Income tax payable 6,000 8,000 Bonds payable 60,000 120,000 Common stock 252,000 228,000 Retained earnings 157.000 98,000 Total liabilities and equity $ 509,000 $ 487,000 During 2011, the company sold for $17,000 cash old equipment that had cost $36,000 and had $ 19,000 accumulated depreciation. Also in 2011, new equipment worth $60,000 was acquired in exchange for $60,000 of bonds payable, and bonds payable of $120,000 were retired for cash at a loss. A $28,000 cash dividend was declared and paid in 2011. Any stock issuances were for cash. (a) Compute the change in cash that occurred in 2011. Cash, December 31, 2011 $ Cash, December 31, 2010 Cash increase during 2011 $
