Question
Z Corporation reported the following balance sheet data for 2021 and 2020: 2021 2020 Cash $161,500 $28,750 Available-for-sale debt securities (not cash equivalents) 15,500 85,000
- Z Corporation reported the following balance sheet data for 2021 and 2020:
| 2021 | 2020 |
Cash | $161,500 | $28,750 |
Available-for-sale debt securities |
|
|
(not cash equivalents) | 15,500 | 85,000 |
Accounts receivable | 70,000 | 48,250 |
Inventory | 173,000 | 151,000 |
Prepaid insurance | 3,500 | 2,000 |
Land, buildings, and equipment | 1,260,000 | 1,125,000 |
Accumulated depreciation | (620,000) | (575,000) |
Total assets | $1,063,500 | $865,000 |
Accounts payable | $76,000 | $135,000 |
Salaries payable | 26,000 | 23,500 |
Notes payable (current) | 30,000 | 65,000 |
Bonds payable | 250,000 | 0 |
Common stock | 300,000 | 300,000 |
Retained earnings | 381,500 | 341,500 |
Total liabilities and shareholders' equity | $1,063,500 | $865,000 |
Additional information for 2021:
(1.) Sold available-for-sale debt securities costing $69,500 for $74,000.
(2.) Equipment costing $30,000 with a book value of $10,000 was sold for $6,000.
(3.) Issued 6% bonds payable at face value, $250,000.
(4.) Purchased new equipment for $165,000 cash.
(5.) Paid cash dividends of $30,000.
(6.) Net income was $70,000.
Required:
Prepare a statement of cash flows for 2021 in good form using the indirect method for cash flows from operating activities.
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