Erie Company reported the following comparative balance sheets: 2019 2018 Assets: Cash $33,200 $12,750 Accounts receivable 53,000 44,800 Inventory 29,500 27,500 Prepaid rent 2,200 6,200 Investments (long-term) 17,600 31,800 Property, plant, and equipment 162,000 149,450 Accumulated depreciation (61,600) (56,200) Total assets $235,900 $216,300 Liabilities and Equity: Accounts payable $16,900 $19,500 Interest payable 3,500 4,800 Wages payable 9,600 7,100 Income taxes payable 5,500 3,600 Notes payable 27,700 53,000 Common stock 100,000 68,500 Retained earnings 72,700 59,800 Total liabilities and equity $235,900 $216,300 Additional Information: Net income for 2019 was $20,300. Cash dividends of $7,400 were declared and paid during 2019. Long-term investments with a cost of $28,600 were sold for cash at a gain of $4,100. Additional long-term investments were purchased for $14,400 cash. Equipment with a cost of $14,800 and accumulated depreciation of $13,500 was sold for $3,800 cash. New equipment was purchased for $27,350 cash. The depreciation expense was $18,900. A principal payment of $25,300 was made on long-term notes. Common stock was sold for $31,500 cash. Required: Prepare a statement of cash flows for Erie, using the indirect method to compute net cash flow from operating activities. Use a minus sign to indicate any decreases in cash or cash outflows. If an answer is zero, enter "0".

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem 11-55A (Algorithmic)
Preparing a Statement of Cash Flows

Erie Company reported the following comparative balance sheets:

	2019	2018
Assets:
Cash	$33,200	$12,750
Accounts receivable	53,000	44,800
Inventory	29,500	27,500
Prepaid rent	2,200	6,200
Investments (long-term)	17,600	31,800
Property, plant, and equipment	162,000	149,450
Accumulated depreciation	(61,600)	(56,200)
Total assets	$235,900	$216,300
Liabilities and Equity:
Accounts payable	$16,900	$19,500
Interest payable	3,500	4,800
Wages payable	9,600	7,100
Income taxes payable	5,500	3,600
Notes payable	27,700	53,000
Common stock	100,000	68,500
Retained earnings	72,700	59,800
Total liabilities and equity	$235,900	$216,300

Additional Information:

Net income for 2019 was $20,300.
Cash dividends of $7,400 were declared and paid during 2019.
Long-term investments with a cost of $28,600 were sold for cash at a gain of $4,100. Additional long-term investments were purchased for $14,400 cash.
Equipment with a cost of $14,800 and accumulated depreciation of $13,500 was sold for $3,800 cash. New equipment was purchased for $27,350 cash.
The depreciation expense was $18,900.
A principal payment of $25,300 was made on long-term notes.
Common stock was sold for $31,500 cash.

Required:

Prepare a statement of cash flows for Erie, using the indirect method to compute net cash flow from operating activities. Use a minus sign to indicate any decreases in cash or cash outflows. If an answer is zero, enter "0".

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