Statement of Cash Flows The comparative balance sheet of Orange Angel Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Dec. 31, 20Y8 Dec. 31, 20Y7 Assets Cash $89,330 $109,920 Accounts receivable (net) 137,260 148,190 Merchandise inventory 196,070 183,660 Prepaid expenses 7,990 5,570 Equipment 399,420 329,080 Accumulated depreciation-equipment (103,850) (80,700) Total assets $726,220 $695,720 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $152,510 $145,410 Mortgage note payable 0 208,720 Common stock, $1 par 24,000 15,000 Excess of paid-in capital over par 349,000 196,000 Retained earnings 200,710 130,590 Total liabilities and stockholders’ equity $726,220 $695,720 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows: Net income, $179,510. Depreciation reported on the income statement, $50,460. Equipment was purchased at a cost of $97,650, and fully depreciated equipment costing $27,310 was discarded, with no salvage realized. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty. 9,000 shares of common stock were issued at $18 for cash. Cash dividends declared and paid, $109,390. Required: Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

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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Question

Statement of Cash Flows

The comparative balance sheet of Orange Angel Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:

	Dec. 31, 20Y8	Dec. 31, 20Y7
Assets
Cash	$89,330		$109,920
Accounts receivable (net)	137,260		148,190
Merchandise inventory	196,070		183,660
Prepaid expenses	7,990		5,570
Equipment	399,420		329,080
Accumulated depreciation-equipment	(103,850)		(80,700)
	Total assets	$726,220		$695,720

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$152,510		$145,410
Mortgage note payable	0		208,720
Common stock, $1 par	24,000		15,000
Excess of paid-in capital over par	349,000		196,000
Retained earnings	200,710		130,590
	Total liabilities and stockholders’ equity	$726,220		$695,720

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:

Net income, $179,510.
Depreciation reported on the income statement, $50,460.
Equipment was purchased at a cost of $97,650, and fully depreciated equipment costing $27,310 was discarded, with no salvage realized.
The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
9,000 shares of common stock were issued at $18 for cash.
Cash dividends declared and paid, $109,390.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

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