Question
The comparative balance sheets of Net Solutions, Inc., for 2019 and the preceding year ended December 31, 2018 appear below in condensed form: Year Year
The comparative balance sheets of Net Solutions, Inc., for 2019 and the preceding year ended December 31, 2018 appear below in condensed form:
Year Year 2019 2018 Cash $ 45,000 $ 53,500 Accounts receivable (net) 51,300 58,000 Inventories 147,200 135,000 Investments 0 60,000 Equipment 532,000 375,000 Accumulated depreciation-equipment (152,700) (128,000) $622,800 $553,500 Accounts payable $ 61,500 $ 42,600 Bonds payable, due 2025 ..... 100,000 Common stock, $10 par 250,000 200,000 Paid-in capital in excess of par-- common stock 75,000 50,000 Retained earnings 236,300 160,900 $622,800 $553,500
The income statement for the current year is as follows:
Sales $623,000 Cost of merchandise sold 348,500 Gross profit $274,500 Operating expenses (including depreciation) 100,000 Income from operations $174,500 Other income: Gain on sale of investment $ 5,000 Other expense: Interest expense 12,000 (7,000) Income before income tax $167,500 Income tax expense 64,100 Net income $103,400
Additional data for the current year are as follows: (a) Equipment was purchased for $157,000. (b) Bonds payable for $100,000 were retired by payment at their face amount. (c) 5,000 shares of common stock were issued at $15 for cash. (d) Cash dividends declared were paid. (e) All sales are on account.
Instructions:
1. Prepare a statement of cash flows using the indirect method
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