The comparative balance sheet of Colson Company, for 2010 and the preceding year
ID: 2488741 • Letter: T
Question
The comparative balance sheet of Colson Company, for 2010 and the preceding year ended December 31. 2009 appears below in condensed form: Additional data tor the current year are as follows: Fully depreciated equipment coding S39.000 was scrapped, no salvage, and equipment was purchased for $157.000. Bonds payable for $100,000 were retired by payment at their face amount. 5.000 shares of common stock were issued at 15 for cash. Cash dividends declared were paid $28,000. Prepare a statement of cash flows, using the indirect method of reporting cash flows from operating activities.Explanation / Answer
Cash flow Statement (Indirect Method) Cash flow from operating activities: Amount ($) Net Income 103,400.0 Adjustment: Interest expenses 12,000 Gain on sale of investment -5,000 Depreciation 24,700 31,700 Adjustment in Working capital: Account Receivable 6700 Inventories -12200 Accounts Payable 18900 13400 Cash flow from operating activities 148,500.0 Cash flow from Investing activities: Sale of investment 65000 Investment in equipment -157000 Cash flow from investing activities -92,000 Cash flow from financing activities: Redemption of bond -100,000 Issue of common stock 50,000 Paid up capital in excess of par 25,000 Dividend paid -28,000 Interest paid -12,000 Cash flow from financing activities -65,000 Cash flow for the year -8,500.0 Beging cash 53500 Ending cash 45,000.0