prepare a statement of cash flow using indirect method
Transcribed Image Text:Sales revenue
Less:
Income tax expense
Interest expense
Loss on disposal of plant assets
Net income
1.
Additional information:
2.
3.
4.
VAUGHN INC.
Income Statement
For the Year Ended December 31, 2022
5.
Cost of goods sold
Operating expenses, excluding depreciation
Depreciation expense
6.
$136,000
12,600
47.200
27,700
4.500
6,800
$387,100
234,800
$152,300
New plant assets costing $100,000 were purchased for cash during the year.
Old plant assets having an original cost of $57,100 and accumulated depreciation of $49,000 were sold for $1,300 cash.
Bonds payable matured and were paid off at face value for cash.
A cash dividend of $35,200 was declared and paid during the year.
Common stock was issued at par for cash.
There were no significant noncash transactions.
Transcribed Image Text:Condensed financial data of Vaughn Inc. follow.
Assets
Cash
Accounts receivable
VAUGHN INC.
Comparative Balance Sheets
December 31
Inventory
Prepaid expenses
Long-term investments
Plant assets
Accumulated depreciation
Total
Liabilities and Stockholders' Equity
Accounts payable
Accrued expenses payable
Bonds payable
Common stock
Retained earnings
Total
2022
$81,700
87,900
111,200
29,300
139,100
285,800
(46,400)
$688,600
$104,900
16,200
113,100
219,400
235,000
$688,600
2021
$49,300
38,000
102,400
27,900
113,800
242,900
(48,200)
$526,100
$62,000
21,100
149,300
175,800
117,900
$526,100
Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).
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