Question
The comparative balance sheet of Freeman Company, for the current year and the preceding year ended December 31, appears below in condensed form: Current Preceding
The comparative balance sheet of Freeman Company, for the current year and the preceding year ended December 31, appears below in condensed form:
Current Preceding
Year Year
-------- ---------
Cash $ 24,900 $ 27,400
Accounts receivable (net) 113,100 94,600
Inventories 194,000 176,500
Prepaid expenses 3,400 4,000
Land 60,000 80,000
Buildings 265,000 155,000
Accumulated depreciation buildings (55,800) (43,500)
Equipment 195,600 185,600
Accumulated depreciation - equipment. (71,500) (74,500)
$728,700 $605,100
======== ========
Accounts payable $ 140,000 $ 143,700
Income tax payable 4,000 3,800
Bonds payable 50,000 --------
Common stock, $1 par 26,000 25,000
Paid-in capital in excess of parcom. stock 350,000 280,000
Retained earnings 158,700 152,600
$728,700 $605,100
======== ========
Additional data for the current year are as follows:
(a) Net income, $12,100.
(b) Depreciation reported on income statement, $39,300.
(c) Fully depreciated equipment costing $30,000 was scrapped, no salvage, and
equipment was purchased for $40,000.
(d) A building was acquired for $110,000
(d) Issued $50,000 of bonds for cash.
(e) 1,000 shares of common stock were issued at $71 for cash.
(f) Cash dividends declared and paid, $6,000.
(g) Land costing $20,000 was sold for $34,000.
Prepare a statement of cash flows using the indirect method.
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