Question
The comparative balance sheet of Pell Company, for 2010 and the preceding year ended December 31, 2009, appears below in condensed form: 2010 /2009 Cash
The comparative balance sheet of Pell Company, for 2010 and the preceding year ended December 31, 2009, appears below in condensed form: 2010 /2009 Cash $66,300 / $55,000 Accounts receivable (net) 62,000 /48,000 Inventories 110,200 / 100,000 Investment none /70,000 Equipment 546,200 / 450,000 Accumulated Depreciation equipment -145,000 / -176,000 Total $639,700 /$547,000 ----------------------------------------------------------------------------------------------- Accounts payable $52,500 / $43,800
Dividends Payable $5000/none Bonds payable, due 2012 none/ 105,000 Common stock 325,000 / 285,000 Paid-in capital in excess of par . common stock 90,000 /55,000 Retained earnings 167,200 / 58,200 total $639,700 / $547,000 -------------------------------------------------------------------------------------------------- Sales ------------------------ $651,000 Cost of merchandise sold 340,000 ------------- Gross profit / $311,000 Operating expenses: Depreciation expense / $29,000 Other operating expenses 65,000 / 94,000 Income from operations $217,000 Other income: Gain on sale of investment $5,000 Other expense Interest expense 7,000 / (2,000) Income before income tax / $215,000 Income tax / 86,000 Net income $129,000 Additional data for the current year: a. Original cost of fully depreciated equipment, no salvage value $60,000 b. Equipment was purchased for cash 156,200 c. Bonds payable were retired by payment at their face amount d. 5,000 shares of common stock were issued for cash e. Cash dividends declared and paid - 20,000 *prepare a statement of cash flows. Use the direct method of reporting cash flows from operating activities; include the reconciliation of cash flows from operating activities.
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