Question
Use the following selected data and additional information to answer the questions that follow: Balance Sheet DataCurrent Year Prior Year Accounts receivable$36,000$42,000Inventories28,00025,000Accounts payable31,00035,000Salaries payable2,0001,000Equipment60,00040,000Accumulated depreciation12,00016,000Bonds
Use the following selected data and additional information to answer the questions that follow:
Balance Sheet DataCurrent
YearPrior
YearAccounts receivable$36,000$42,000Inventories28,00025,000Accounts payable31,00035,000Salaries payable2,0001,000Equipment60,00040,000Accumulated depreciation12,00016,000Bonds payable50,000100,000Common stock150,000100,000Retained earnings38,00020,000Income Statement DataCurrent
YearNet sales$420,000Cost of goods sold300,000Operating expenses (excluding depreciation expense)84,000Net income30,000Gain on sale of equipment (included in net income above)2,000Additional information:
- Equipment with a cost of $15,000 and a book value of $3,000 was sold for $5,000 during the current year.
- Common stock was issued to retire bonds payable during the current year.
- Dividends declared and paid during the current year were $12,000.
A.Prepare the operating activities section of a statement of cash flows for the current year using the indirect method. Amounts to be subtracted should be indicated by a minus sign.
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