Problem 12-19A (Algo) Using financial statements to prepare a statement of cash flows-indirect method LO 12-1, 12-3, 12-4 The comparative balance sheets and an income statement for Raceway Corporation follow. Balance Sheets As of December 31 Year 2 Year 1 Assets Cash Accounts receivable Inventory Prepaid rent $68,940 32,100 156,647 $39,800 23,540 172,310 Equipment 2,490 252,140 4,980 285,080 Accumulated depreciation (140,310) (233,210) Land 194,490 83,690 Total assets $566,497 $376,190 Liabilities Accounts payable (inventory) $66,991 75,990 Salaries payable 25,235 21,630 Stockholders' equity Common stock, $50 par value 253,000 201,000 Retained earnings 221,271 77,570 Total liabilities and equity $566,497 $376,190 Income Statement For the Year Ended December 31, Year 2 Sales Cost of goods sold Gross profit $1,499,000 (796,669) 702,331 (23,040) Operating expenses Depreciation expense Rent expense Salaries expense Other operating expenses Net income Other Information 1. Purchased land for $110,800. 2. Purchased new equipment for $102,000. (22,650) (253,360) (259,580) $143,701 3. Sold old equipment that cost $134,940 with accumulated depreciation of $115,940 for $19,000 cash. 4. Issued common stock for $52,000. Required Prepare the statement of cash flows for Year 2 using the indirect method. (Cash outflows should be indicated with a minus sign.) RACEWAY CORPORATION Statement of Cash Flows Cash flows from operating activities: For the Year Ended December 31, Year 2 Plus: Decreases in current assets and increases in current liabilities Less: Increases in current assets and decreases in current liabilities: Plus: Noncash charges Cash flows from investing activities: Cash flows from financing activities: Ending cash balance $ 0 0 0 0 0
Problem 12-19A (Algo) Using financial statements to prepare a statement of cash flows-indirect method LO 12-1, 12-3, 12-4 The comparative balance sheets and an income statement for Raceway Corporation follow. Balance Sheets As of December 31 Year 2 Year 1 Assets Cash Accounts receivable Inventory Prepaid rent $68,940 32,100 156,647 $39,800 23,540 172,310 Equipment 2,490 252,140 4,980 285,080 Accumulated depreciation (140,310) (233,210) Land 194,490 83,690 Total assets $566,497 $376,190 Liabilities Accounts payable (inventory) $66,991 75,990 Salaries payable 25,235 21,630 Stockholders' equity Common stock, $50 par value 253,000 201,000 Retained earnings 221,271 77,570 Total liabilities and equity $566,497 $376,190 Income Statement For the Year Ended December 31, Year 2 Sales Cost of goods sold Gross profit $1,499,000 (796,669) 702,331 (23,040) Operating expenses Depreciation expense Rent expense Salaries expense Other operating expenses Net income Other Information 1. Purchased land for $110,800. 2. Purchased new equipment for $102,000. (22,650) (253,360) (259,580) $143,701 3. Sold old equipment that cost $134,940 with accumulated depreciation of $115,940 for $19,000 cash. 4. Issued common stock for $52,000. Required Prepare the statement of cash flows for Year 2 using the indirect method. (Cash outflows should be indicated with a minus sign.) RACEWAY CORPORATION Statement of Cash Flows Cash flows from operating activities: For the Year Ended December 31, Year 2 Plus: Decreases in current assets and increases in current liabilities Less: Increases in current assets and decreases in current liabilities: Plus: Noncash charges Cash flows from investing activities: Cash flows from financing activities: Ending cash balance $ 0 0 0 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 12-19A (Algo) Using financial statements to prepare a statement of cash flows-indirect
method LO 12-1, 12-3, 12-4
The comparative balance sheets and an income statement for Raceway Corporation follow.
Balance Sheets
As of December 31
Year 2
Year 1
Assets
Cash
Accounts receivable
Inventory
Prepaid rent
$68,940
32,100
156,647
$39,800
23,540
172,310
Equipment
2,490
252,140
4,980
285,080
Accumulated depreciation
(140,310)
(233,210)
Land
194,490
83,690
Total assets
$566,497
$376,190
Liabilities
Accounts payable (inventory)
$66,991
75,990
Salaries payable
25,235
21,630
Stockholders' equity
Common stock, $50 par value
253,000
201,000
Retained earnings
221,271
77,570
Total liabilities and equity
$566,497
$376,190
Income Statement
For the Year Ended December 31, Year 2
Sales
Cost of goods sold
Gross profit
$1,499,000
(796,669)
702,331
(23,040)
Operating expenses
Depreciation expense
Rent expense
Salaries expense
Other operating expenses
Net income
Other Information
1. Purchased land for $110,800.
2. Purchased new equipment for $102,000.
(22,650)
(253,360)
(259,580)
$143,701
3. Sold old equipment that cost $134,940 with accumulated depreciation of $115,940 for $19,000 cash.
4. Issued common stock for $52,000.
Transcribed Image Text:Required
Prepare the statement of cash flows for Year 2 using the indirect method. (Cash outflows should be indicated with a minus sign.)
RACEWAY CORPORATION
Statement of Cash Flows
Cash flows from operating activities:
For the Year Ended December 31, Year 2
Plus: Decreases in current assets and increases in current liabilities
Less: Increases in current assets and decreases in current liabilities:
Plus: Noncash charges
Cash flows from investing activities:
Cash flows from financing activities:
Ending cash balance
$
0
0
0
0
0
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