Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The comparative balance sheet of Nance Company, for the current year and the preceding year ended December 31, appears below: Current Year Preceding Year Cash

The comparative balance sheet of Nance Company, for the current year and the preceding year ended December 31, appears below:

Current Year Preceding Year

Cash $70,000 $52,500

Accounts Receivable 83,000 90,100

Inventories 204,400 193,900

Investments -0- 50,000

Equipment 600,000 510,000

Accumulated Depreciation-Equipment (175,000) (190,000)

$782,400 $706,500

Accounts Payable $97,250 77,750

Long-Term Bonds Payable -0- 100,000

Common Stock, $20 par value 450,000 400,000

Paid-in Capital in Excess of Par Value 70,000 50,000

Retained Earnings 165,150 78,750

$782,400 $706,500

Additional data for the current year are as follows:

1. Net income is equal to $146,400.

2. Depreciation reported on the income statement is $35,000.

3. Equipment was purchased for $140,000 cash.

4. Long-Term bonds payable were paid in cash at their face amount.

5. 2,500 shares of common stock were issued at $28 per share for cash.

6. Cash dividends of $60,000 were paid in cash.

7. Investments with a cost of $50,000 were sold for $75,000 cash.

Required: Prepare a statement of cash flows using the indirect method.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

LO4 Explain the benefits of branding. (p. 190)

Answered: 1 week ago