Business Course # My Subscriptions - Statement of Cash Flows (Direct Method) Dair Company's income statement and comparative balance sheets follow. DAIR COMPANY Income Statement For Year Ended December 31, 2011 Sales $ 700.000 Cost of goods sold Wages and other operating expenses 95,000 Depreciation expense 22,000 Amortization expense Interest expense Income tax expense 34,000 Loss on bond retirement 5,000 609,000 Net income 591,000 $ 440,000 7.000 6.000 Support eest expense DAIR COMPANY Balance Sheets Dec. 31, 2011 Dec. 31, 2010 Assets Cash Accounts receivable Inventory Prepaid expenses $ 45,000 53,000 103,000 12.000 $ 22,000 48,000 112,000 11,000 BusinessCourse 3 My Subscriptions - DAIR COMPANY Balance Sheets Dec. 31, 2011 Dec. 31, 2010 Assets Cash 5 45,000 $22.000 Accounts receivable 53.000 48.000 Inventory 103,000 112.000 Prepaid expenses 12,000 11,000 Plant assets 358,000 329.000 Accumulated depreciation (87.000) (84,000) Intangible assets 43,000 50.000 Total assets $ 527,000 $488.000 Liabilities and Stockholders' Equity Accounts payable $ 33,000 $ 26,000 Interest payable 2,000 7.000 Income tax payable 3,000 8,000 Bonds payable 65,000 117.000 Common stock 252.000 228.000 Retained earnings 172.000 102.000 Total liabilities and equity 5 527,000 $488,000 Support During 2011, the company sold for $17,000 cash old equipment that had cost $36,000 and had 519,000 accumulated depreciation. Also in 2011, new equipment worth $65,000 was acquired in exchange for $65,000 of bonds payable, and bonds Business Course # My Subscriptions - During 2011, the company sold for $17,000 cash old equipment that had cost $36,000 and had $19,000 accumulated depreciation. Also in 2011, new equipment worth $65,000 was acquired in exchange for $65,000 of bonds payable, and bonds payable of $117,000 were retired for cash at a loss. A $21,000 cash dividend was declared and paid in 2011. Any stock issuances were for cash. (a) Compute the change in cash that occurred in 2011. Cash, December 31, 2011 $ 45,000 Cash, December 31, 2010 Cash increase during 2011 $ 23,000 Support (b) Prepare a 2011 statement of cash flows using the direct method. Use one cash flow for "cash paid for wages and other operating expenses. Accounts payable relate to inventory purchases only. HINT: Use negative signs with your answers, when appropriate DAIR COMPANY Statement of Cash Flows For Year Ended December 31, 2011 Cash Flows from Operating Activities Cash received from customers Cash paid for merchandise purchased Cash paid for wages & other operating expenses CCTV Y Pressum HINT: Use negative signs with your answers, when appropriate DAIR COMPANY Statement of Cash Flows For Year Ended December 31, 2011 Cash Flows from Operating Activities Cash received from customers Cash paid for merchandise purchased Cash paid for wages & other operating expenses Cash paid for interest Cash paid for income taxes Net cash provided by operating activities Cash flows from investing activities Sale of equipment Cash Flows from Financing Activities Retirement of bonds payable Issuance of common stock Payment of dividends Net cash used by financing activities Net increase(decrease) in cash Cash at beginning of year Cash at end of year oooo Support o JITICUL VIOUILL My Subscriptions - Business Course Cash Tows From invesung activities Sale of equipment Cash Flows from Financing Activities Retirement of bonds payable Issuance of common stock Payment of dividends Net cash used by financing activities Net increase(decrease) in cash Cash at beginning of year Cash at end of year OOO Support (c) Prepare separate schedules showing (1) cash paid for interest and for income taxes and (2) noncash investing and financing transactions. (1) Supplemental Cash Flow Disclosures Cash Paid for interest $ 11,000 Cash Paid for Income Taxes $ 39,000 (2) Schedule of Noncash investing and Financing Activities Issuance of Bonds Payable to acquire Equipment $ 65,000 Check