Prepare the Statement of Cash Flows for the following company: INCOME STATEMENT
ID: 2375328 • Letter: P
Question
Prepare the Statement of Cash Flows for the following company:
INCOME STATEMENT
Sales 5,000
Gain on Sale of Land/Building 2,000
Cost of Goods Sold (3,000)
Gross Profit on Sales 4,000
Operating Expenses:
Depreciation 300
Other 500 (800)
Net Income 3,200
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BALANCE SHEETS
2012 2011
ASSETS
Cash 500 350
Accounts Receivable 300 440
Inventory 900 750
Prepaid Expenses 100 85
Land 2,500 2,700
Building 2,500 3,000
Accumulated Depreciation (670) (370)
Total Assets 6,130 6,955
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EQUITIES
Accounts Payable 420 855
Accrued Payables --- 500
Bonds Payable 510 3,600
Common Stock 1,700 1,500
Retained Earnings 3,500 500
Total Equities 6,130 6,955 _________________________________________________________________
Other information
a. Land with a cost basis of $200 and Buildings with a cost basis of $500 were sold for $2,700 cash. No deprecation had been recorded on these assets.
b. Paid off $3,090 of bonds payable during the year.
c. A $200 cash dividend was declared and paid
d. Common stock was issued for $200 cash.
Explanation / Answer
statemen of csah flow
operating activity
net income 3200
Add:depreciation 300
accounts receivable 140
less
accounts payable 435
accrued payable 500
bonds payable 3090
inventory 150
prepaid expense 15
gain on sale 2000
total -2550
investing activity
sale of land and building 2700
total 2700
Financing activity
issue of common stock 200
dividend (200)
total nil
toatl cash flow= 2700-2550=150
cash in begining 350
cash in ending i.e.2012 500