Question
Sunnyvale Corporation prepared the following balance sheet data for 2011 and 2010: Dec. 31, 2011 Dec. 31, 2010 Cash and cash equivalents $ 518,500 $
Sunnyvale Corporation prepared the following balance sheet data for 2011 and 2010: Dec. 31, 2011 Dec. 31, 2010 Cash and cash equivalents $ 518,500 $ 675,000 Accounts Receivable 360,000 345,000 Merchandise Inventory 750,000 654,000 Prepaid insurance 4,500 6,000 Buildings and equipment 5,515,500 4,350,000 Accumulated depreciation-buildings and equipment (2,235,000) (1,995,000) Total Assets $ 4,913,500 $ 4,035,000 Accounts Payable $ 613,500 945,000 Salaries Payable 75,000 105,000 Notes Payable-bank (current) 150,000 600,000 Notes Payable-bank (long-term) 1,500,000 0 Common Stock 2,400,000 2,400,000 Retained earnings (deficit) 175,000 (15,000) Total liabilities and stockholders' equity $ 4,913,500 $ 4,035,000 Cash needed to purchase new equipment and to improve the company's working capital position was raised by borrowing from the bank with a long-term note. Equipment costing $75,000 with a book value of $15,000 was sold for $18,000; the gain on the sale was included in net income. The company paid cash dividends of $90,000 and reported earnings of $280,000 for 2011. There were no entries in the retained earnings account other than to record the dividends and net income for the year. Prepare a statement of cash flows for 2011 using the indirect method (template attached)
21-15 Name: Enter the appropriate amounts in the shaded cells in columns E and G. Sunnyvale Corporation Statement of Cash Flows (Indirect Method) For the Year Ended December 31, 2011 Cash flows from operating activities: Net income Adjustments: Depreciation expense Gain on sale of equipment Increase in accounts receivable Increase in merchandise inventory Decrease in prepaid insurance Decrease in accounts payable Decrease in salaries payable Net cash provided by operating activities Cash flows from investing activities: Purchase of machinery Purchase of buildings & equipment Net cash used in investing activities Cash flows from financing activities: Issuance of long-term note Payment of dividends Payment of note payable at bank Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of yearStep by Step Solution
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