Prepare a statement of cash (SO 3, AP Presented are the comparative balance shee
ID: 2577911 • Letter: P
Question
Prepare a statement of cash (SO 3, AP Presented are the comparative balance sheets for Vernet Company at December 31. VERNET COMPANY Comparative Balance Sheets December 31 2012 $41,000 S57,000 77,000 64,000 172,000 140,000 12,140 16,540 110,000 150,000 215,000 175,000 2011 Assets Cash Accounts receivable Inventory Prepaid expenses Land Equipment Accumulated depreciation-equipment (0,000) (42,000) Buildings Accumulated depreciation-buildings (70,000) (50,000) 250,000 250,000 Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock, $1 par Retained earnings $737,140 $760,540 $ 58,000 S 45,000 235,000 265,000 280,000 250,000 164,140 200,540 $737,140 $760,540 Total Additional information: 1. Operating expenses include depreciation expense $$5,000 and charges from prepaid expenses of $4,400. 2. Land was sold for cash at cost 3. Cash dividends of $84,290 were paid. 4. Net income for 2012 was $47,890. 5. Equipment was purchased for $80,000 cash. In addition, equipment costing $40,000 with a book value of $33,000 was sold for $37,000 cash. 6. Bonds were converted at face value by issuing 30,000 shares of S1 par value common stock. Instructions Prepare a statement of cash flows for 2012 using the indirect method.Explanation / Answer
Statement of cash flow :
Cash flow from operating activities net income 47890 Adjustment to reconcile net income Depreciation 55000 Gain on sale of equipment (4000) Increase account receivable (13000) Increase inventory (32000) Decrease prepaid expenses 4400 Increase account payable 13000 Net cash flow from operating activities 71290 Cash flow from investing activities Land sold 40000 Equipment sold 37000 Equipment purchased (80000) Net cash flow from investing activities (3000) Cash flow from financing activiites Dividend paid (84290) Net cash flow from financing activities (84290) Net cash flow (16000) Beginning cash 57000 Ending cash 41000