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Cash flows from operating activities - using INDIRECT method Balance sheets Cash 12/31/2024 12/31/2023 23,000 30,000 Accounts receivable 35,000 40,000 Inventory 63,000 48,000 Equipment 330,000 350,000 Accumulated Depreciation (65,000) (55,000) Total Assets 386,000 413,000 Accounts Payable 24,000 32,000 Interest Payable 12,000 11,000 Bonds Payable 100,000 200,000 Common stock 130,000 70,000 Retained Earnings 120,000 100,000 Total Liabilities and Equity 386,000 413,000 Income statement 12/31/2024 Sales 980,000 Cost of sales (780,000) Operating Expenses (145,000) Rent Revenue 20,000 Gain on sale of equipment 3,000 Interest Expense (24,000) Loss on bond redemption (3,000) Net income 51,000 From the general journal and general ledger 1) Accounts payable pertains to purchases of inventory only. 2) Operating expenses include depreciation expense. 3) Equipment costing 250,000 was sold at a gain for $203,000 cash. 4) Additional equipment was purchased for cash. 5) Bonds issued at par were called at a loss for $103,000 cash 6) Dividends were declared and paid in cash. 7) Additional shares of stock were issued for cash.

Cash flows from operating activities - using INDIRECT method Balance sheets Cash 12/31/2024 12/31/2023 23,000 30,000 Accounts receivable 35,000 40,000 Inventory 63,000 48,000 Equipment 330,000 350,000 Accumulated Depreciation (65,000) (55,000) Total Assets 386,000 413,000 Accounts Payable 24,000 32,000 Interest Payable 12,000 11,000 Bonds Payable 100,000 200,000 Common stock 130,000 70,000 Retained Earnings 120,000 100,000 Total Liabilities and Equity 386,000 413,000 Income statement 12/31/2024 Sales 980,000 Cost of sales (780,000) Operating Expenses (145,000) Rent Revenue 20,000 Gain on sale of equipment 3,000 Interest Expense (24,000) Loss on bond redemption (3,000) Net income 51,000 From the general journal and general ledger 1) Accounts payable pertains to purchases of inventory only. 2) Operating expenses include depreciation expense. 3) Equipment costing 250,000 was sold at a gain for $203,000 cash. 4) Additional equipment was purchased for cash. 5) Bonds issued at par were called at a loss for $103,000 cash 6) Dividends were declared and paid in cash. 7) Additional shares of stock were issued for cash.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter15: Statement Of Cash Flows
Section: Chapter Questions
Problem 2DQ
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Cash flows from operating activities - using INDIRECT method
Transcribed Image Text:Cash flows from operating activities - using INDIRECT method
Balance sheets Cash 12/31/2024 12/31/2023 23,000 30,000 Accounts receivable 35,000 40,000 Inventory 63,000 48,000 Equipment 330,000 350,000 Accumulated Depreciation (65,000) (55,000) Total Assets 386,000 413,000 Accounts Payable 24,000 32,000 Interest Payable 12,000 11,000 Bonds Payable 100,000 200,000 Common stock 130,000 70,000 Retained Earnings 120,000 100,000 Total Liabilities and Equity 386,000 413,000 Income statement 12/31/2024 Sales 980,000 Cost of sales (780,000) Operating Expenses (145,000) Rent Revenue 20,000 Gain on sale of equipment 3,000 Interest Expense (24,000) Loss on bond redemption (3,000) Net income 51,000 From the general journal and general ledger 1) Accounts payable pertains to purchases of inventory only. 2) Operating expenses include depreciation expense. 3) Equipment costing 250,000 was sold at a gain for $203,000 cash. 4) Additional equipment was purchased for cash. 5) Bonds issued at par were called at a loss for $103,000 cash 6) Dividends were declared and paid in cash. 7) Additional shares of stock were issued for cash.
Transcribed Image Text:Balance sheets Cash 12/31/2024 12/31/2023 23,000 30,000 Accounts receivable 35,000 40,000 Inventory 63,000 48,000 Equipment 330,000 350,000 Accumulated Depreciation (65,000) (55,000) Total Assets 386,000 413,000 Accounts Payable 24,000 32,000 Interest Payable 12,000 11,000 Bonds Payable 100,000 200,000 Common stock 130,000 70,000 Retained Earnings 120,000 100,000 Total Liabilities and Equity 386,000 413,000 Income statement 12/31/2024 Sales 980,000 Cost of sales (780,000) Operating Expenses (145,000) Rent Revenue 20,000 Gain on sale of equipment 3,000 Interest Expense (24,000) Loss on bond redemption (3,000) Net income 51,000 From the general journal and general ledger 1) Accounts payable pertains to purchases of inventory only. 2) Operating expenses include depreciation expense. 3) Equipment costing 250,000 was sold at a gain for $203,000 cash. 4) Additional equipment was purchased for cash. 5) Bonds issued at par were called at a loss for $103,000 cash 6) Dividends were declared and paid in cash. 7) Additional shares of stock were issued for cash.
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