MARIN COMPANYComparative Balance SheetsDecember 31Assets20102009$ 41,00077,000$ 57,00064,000CashAccounts receivable172,000140,000InventoryPrepaid expensesLand12,14016,540110,000150,000EquipmentAccumulated depreciation-equipmentBuildingAccumulated depreciation-building215,000(70,000)250,000175,000(42,000)250,000(50,000)$760,540(70,000)Total$737,140Liabilities and Stockholders' Equity$ 58,000235,000$ 45,000265,000Accounts payableBonds payableCommon stock, $1 parRetained earnings280,000250,000164,140200,540Total$737,140$760,540Additional information:1. Operating expenses include depreciation expense $55,000 and charges from prepaidexpenses of $4,400.2. Land was sold for cash at cost.3. Cash dividends of $84,290 were paid.4. Net income for 2010 was $47,890.5. Equipment was purchased for $80,000 cash. In addition, equipment costing $40,000 with abook value of $33,000 was sold for $37,000 cash.6. Bonds were converted at face value by issuing 30,000 shares of $1 par value common stock.InstructionsPrepare a statement of cash flows for 2010 using the indirect method.

Schedule for changes in working capital 2010 2009 Difference Accounts Payable…

MARIN COMPANY Comparative Balance Sheets December 31 Assets 2010 2009 $ 41,000 $ 57,000 64,000 140,000 Cash Accounts receivable 77,000 Inventory Prepaid expenses 172,000 12,140 16,540 Land 110,000 150,000 Equipment Accumulated depreciation-equipment Building Accumulated depreciation-building 215,000 (70,000) 250,000 (70,000) 175,000 (42,000) 250,000 (50,000) Total $737,140 $760,540 Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock, $1 par Retained earnings $ 58,000 235,000 280,000 $ 45,000 265,000 250,000 200,540 164,140 Total $737,140 $760,540 Additional information: 1. Operating expenses include depreciation expense $55,000 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 2010 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 $1 par value common stock. Instructions Prepare a statement of cash flows for 2010 using the indirect method.

MARIN COMPANY Comparative Balance Sheets December 31 Assets 2010 2009 $ 41,000 $ 57,000 64,000 140,000 Cash Accounts receivable 77,000 Inventory Prepaid expenses 172,000 12,140 16,540 Land 110,000 150,000 Equipment Accumulated depreciation-equipment Building Accumulated depreciation-building 215,000 (70,000) 250,000 (70,000) 175,000 (42,000) 250,000 (50,000) Total $737,140 $760,540 Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock, $1 par Retained earnings $ 58,000 235,000 280,000 $ 45,000 265,000 250,000 200,540 164,140 Total $737,140 $760,540 Additional information: 1. Operating expenses include depreciation expense $55,000 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 2010 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 $1 par value common stock. Instructions Prepare a statement of cash flows for 2010 using the indirect method.

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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