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The comparative balance sheets and income statements for Dragon Company follow. Balance Sheets As of December 31 Year 2 Year i Assets Cash Accounts receivable
The comparative balance sheets and income statements for Dragon Company follow. Balance Sheets As of December 31 Year 2 Year i Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Land Total assets Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and equity $24,498 $ 2,699 2,097 1,258 6,599 6,187 21,814 43,824 (8,767) (16,089) 17,9668 ,406 $64,207 $ 46,285 $ 2,704 2,811 23,200 35, 492 $64,207 $ 4,369 6,425 10,500 24,991 $ 46,285 Income Statement For the Year Ended December 31, Year 2 $ 39,000 Cost of goods sold (15,458) Gross margin 23,542 Depreciation expense (3,150) Operating income 20, 392 Gain on sale of equipment 650 Loss on disposal of land (40) Net income $ 21,002 Additional Data 1. During Year 2, the company sold equipment for $18,778; it had originally cost $28,600. Accumulated depreciation on this equipment was $10,472 at the time of the sale. Also, the company purchased equipment for $6,590 cash. 2. The company sold land that had cost $3,140. This land was sold for $3,100, resulting in the recognition of a $40 loss. Also, common stock was issued in exchange for title to land that was valued at $12,700 at the time of exchange. 3. Paid dividends of $10,501. Required Prepare a statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) GYPSY COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Less: Increases in current assets and Decreases in current liabilities: Plus: Noncash charges Cash flows from investing activities: Cash flows from financing activities: Ending cash balance Schedule of noncash investing and financing activities
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