(Statement Presentation of Transactions—Indirect Method) Each of the following items must be considered in preparing a statement of cash flows (indirect method) for Turbulent Indigo Inc. for the year ended December 31, 2017.(a) Plant assets that had cost $20,000 6 years before and were being depreciated on a straight-line basis over 10 years with no estimated scrap value were sold for $5,300.(b) During the year, 10,000 shares of common stock with a stated value of $10 a share were issued for $43 a share.(c) Uncollectible accounts receivable in the amount of $27,000 were written off against Allowance for Doubtful Accounts.(d) The company sustained a net loss for the year of $50,000. Depreciation amounted to $22,000, and a gain of $9,000 was realized on the sale of land for $39,000 cash.(e) A 3-month U.S. Treasury bill was purchased for $100,000. The company uses a cash and cash equivalent basis for its cash flow statement.(f) Patent amortization for the year was $20,000.(g) The company exchanged common stock for a 70% interest in Tabasco Co. for $900,000.(h) During the year, treasury stock costing $47,000 was purchased.InstructionsState where each item is to be shown in the statement of cash flows, if at all.
(Statement Presentation of Transactions—Indirect Method) Each of the following items must be considered in preparing a statement of
(a) Plant assets that had cost $20,000 6 years before and were being
(b) During the year, 10,000 shares of common stock with a stated value of $10 a share were issued for $43 a share.
(c) Uncollectible
(d) The company sustained a net loss for the year of $50,000. Depreciation amounted to $22,000, and a gain of $9,000 was realized on the sale of land for $39,000 cash.
(e) A 3-month U.S. Treasury bill was purchased for $100,000. The company uses a cash and cash equivalent basis for its cash flow statement.
(f) Patent amortization for the year was $20,000.
(g) The company exchanged common stock for a 70% interest in Tabasco Co. for $900,000.
(h) During the year,
Instructions
State where each item is to be shown in the statement of cash flows, if at all.
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