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The comparative balance sheet of Portable Luggage Company at December 31, 2008 and 2007, is as follows: Dec. 31, 2008 Dec. 31, 2007 Assets Cash
The comparative balance sheet of Portable Luggage Company at December 31, 2008 and 2007, is as follows: Dec. 31, 2008 Dec. 31, 2007 Assets Cash 175,900 143,200 Accounts receivable (net) 264,100 235,000 Inventories 352,300 405,800 Prepaid Expenses 12,500 10,000 Land 120,000 120,000 Buildings 680,000 450,000 Accumulated depreciation-building (185,000) (164,500) Machinery and equipment 310,000 310,000 Accumulated deprecation machinery & equipment (85,000) (76,000) Patents 42,500 48,000 1,687,300 1,481,500 Liabilities and Stockholders Equity Accounts payable (merchandise creditors) 332,300 367,900 Dividends payable 13,000 10,000 Salaries payable 30,200 34,600 Mortgage not payable, due 2015 90,000 ------- Bonds payable ------- 154,000 Common stock, $1 par 24,000 20,000 Paid-in capital in excess of par- common stock 200,000 50,000 Retained earnings 997,800 845,000 1,687,300 1,481,500 An examination of the income statement and the accounting records revealed the following additional information applicable to 2008: a. Net income, 204,800 b. Depreciation expense reported on the income statement: buildings, 20,500; machinery and equipment, 9,000 c. Patent amortization reported on the income statement, 5,500 d. A building was constructed for $230,000 e. A mortgage note for 90,000 was issued for cash. f. 4,000 shares of common stock were issued at 38.50 in exchange for the bonds payable g. Cash dividends declared 52,000 Prepare a Statement of Cash Flows, using the indirect method of presenting cash flows from operating activities. **The Net cash flow from operating activities should be $221,700**
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