Question
The comparative balance sheet for Hatfield Company appears below: HATFIELD COMPANY Comparative Balance Sheet Dec. 31, 2010 Dec. 31, 2009 Assets Cash ................................ ................................ .........................
The comparative balance sheet for Hatfield Company appears below:
HATFIELD COMPANY
Comparative Balance Sheet
Dec.
31, 2010
Dec. 31,
2009
Assets
Cash
................................
................................
.........................
$38,000
$12,000
Accounts receivable
................................
................................
....
8,000
8,000
Inventory
................................
................................
.....................
14,000
7,000
Prepaid expenses
................................
................................
.......
2,000
3,000
Equipment
................................
................................
...................
24,000
20,000
Accumulated depreciation
equipment
................................
.......
(7,000
)
(2,000
)
Total assets
................................
................................
...........
$79,000
$48,
000
Liabilities and Stockholders' Equity
Accounts payable
................................
................................
........
$ 3,000
$ 4,000
Long
-
term note payable
................................
..............................
9,000
14,000
Common stock
................................
................................
............
35,000
18,000
Retained earnings
................................
................................
.......
32,000
12,000
Total liabilities and stockholders' equity
................................
.
$79,000
$48,000
The
income statement for the year is as follows:
HATFIELD COMPANY
Income Statement
For the Year Ended December 31, 2010
Sales (all on credit)
................................
................................
.....
$250,000
Expenses and losses
Cost of goods sold
................................
................................
$170,000
Operating expenses, exclusive of depreciation
.......................
37,000
Depreciation expense
................................
............................
5,000
Interest expense
................................
................................
....
2,000
Loss on sale of land
................................
..............................
1,000
Income taxes
................................
................................
.........
7,000
Total expenses and loss
................................
..................
222,000
Net income
................................
................................
..................
$ 28,000
Cash dividends of $8,000 were paid during the year. Land costing $17,000 was
acquired by the
issuance of common stock. The property was subsequently sold for $16,000 cash.
Instructions
Prepare a statement of cash flows for the year ended December 31, 2010, using the indirect
method.
and
Prepare a statement of cash flows for the
year ended December 31, 2010, using the direct
method.
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Core Concepts Of Accounting Information Systems
Authors: Nancy A. Bagranoff, Mark G. Simkin, Carolyn Strand Norman
11th Edition
9780470507025, 0470507020
