Preparing a Statement of Cash Flows-Indirect Method Sketchers Corporation's recent comparative balance sheet and income statement follow. Balance Sheet, December 31 Assets Cash and cash equivalents Accounts receivable (net) Inventory Investment, long-term Plant assets Accumulated depreciation Total assets Prior Year Current Year $16,000 20,000 40,000 8,000 120,000 (20,000) $184,000 Liabilities and Stockholders' Equity Accounts payable $12,000 Notes payable, short-term (nontrade) 16,000 Notes payable, long-term 40,000 Common stock, no-par 100,000 Retained earnings 16,000 Total liabilities and stockholders' equity $184,000 Depreciation expense Other operating expenses Net income Income Statement, For Year Ended, December 31 Current Year Sales revenue Cost of goods sold Gross margin $600,000 (360,000) 240,000 (8,000) (128,000) $104,000 $68,000 36,000 48,000 188,000 (28,000) $312,000 $20,000 12,000 72,000 160,000 48,000 $312,000

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Preparing a Statement of Cash Flows-Indirect Method
Sketchers Corporation's recent comparative balance sheet and income statement follow.
Balance Sheet, December 31
Assets
Cash and cash equivalents
Accounts receivable (net)
Inventory
Investment, long-term
Plant assets
Accumulated depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Prior Year Current Year
$16,000
20,000
40,000
8,000
120,000
(20,000)
$184,000
$12,000
Notes payable, short-term (nontrade)
16,000
Notes payable, long-term
40,000
Common stock, no-par
100,000
Retained earnings
16,000
Total liabilities and stockholders' equity $184,000
Income Statement, For
Year Ended, December 31 Current Year
Sales revenue
Cost of goods sold
Gross margin
Depreciation expense
Other operating expenses
Net income
$600,000
(360,000)
240,000
(8,000)
(128,000)
$104,000
$68,000
36,000
48,000
188,000
(28,000)
$312,000
$20,000
12,000
72,000
160,000
48,000
$312,000
Transcribed Image Text:Preparing a Statement of Cash Flows-Indirect Method Sketchers Corporation's recent comparative balance sheet and income statement follow. Balance Sheet, December 31 Assets Cash and cash equivalents Accounts receivable (net) Inventory Investment, long-term Plant assets Accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Prior Year Current Year $16,000 20,000 40,000 8,000 120,000 (20,000) $184,000 $12,000 Notes payable, short-term (nontrade) 16,000 Notes payable, long-term 40,000 Common stock, no-par 100,000 Retained earnings 16,000 Total liabilities and stockholders' equity $184,000 Income Statement, For Year Ended, December 31 Current Year Sales revenue Cost of goods sold Gross margin Depreciation expense Other operating expenses Net income $600,000 (360,000) 240,000 (8,000) (128,000) $104,000 $68,000 36,000 48,000 188,000 (28,000) $312,000 $20,000 12,000 72,000 160,000 48,000 $312,000
Additional Information
1. Sold the long-term investment at cost, for cash.
2. Declared and paid a cash dividend of $28,000.
3. Purchased plant assets that cost $68,000; gave a $48,000 long-term note payable and paid $20,000 cash.
4. Paid a $16,000 long-term note payable by issuing common stock; fair value, $16,000.
5. Issued a stock dividend, $44,000.
Prepare the statement of cash flows for the current year ended December 31, assuming the indirect method is used in presenting cash flows from operating activities.
• Note: Indicate a subtraction in the cash flow statement with a negative sign with the amount.
Cash flows from operating activities
Adjustments:
Statement of Cash Flows
For the Year Ended December 31
Cash flows from investing activities
Cash flows from financing activities
Noncash Disclosure
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$
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Transcribed Image Text:Additional Information 1. Sold the long-term investment at cost, for cash. 2. Declared and paid a cash dividend of $28,000. 3. Purchased plant assets that cost $68,000; gave a $48,000 long-term note payable and paid $20,000 cash. 4. Paid a $16,000 long-term note payable by issuing common stock; fair value, $16,000. 5. Issued a stock dividend, $44,000. Prepare the statement of cash flows for the current year ended December 31, assuming the indirect method is used in presenting cash flows from operating activities. • Note: Indicate a subtraction in the cash flow statement with a negative sign with the amount. Cash flows from operating activities Adjustments: Statement of Cash Flows For the Year Ended December 31 Cash flows from investing activities Cash flows from financing activities Noncash Disclosure > くくく > > > > > $ $ $
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