The comparative balance sheet of Gold Coast Company for Years 1 and 2 ended December 31 appears below in condensed form: Year 2 Year 1 Cash $ 64,000 $ 42,500 Accounts receivable (net) 61,000 70,200 Inventories 121,000 105,000 Investments 100,000 Equipment 520,000 425,000 Accumulated depreciation-equipment (150,000) (175,000) $616,000 $567,700 Accounts payable $44,750 $35,250 Dividends Payable $15,000 $12,000 Bonds payable 75,000 Common stock, $20 par 375,000 325,000 Premium on common stock 50,000 25,000 131.250 95.450 Retained earnings $616,000 $567,700 Additional data for the current year are as follows: (a) Net income, $80,000. (b) Depreciation reported on income statement, $35,000. (c) Equipment costing $80,000 that has been depreciated for $60,000 was sold for $10,000, and new equipment was purchased for $170,000. (d) Bonds payable for $75,000 were retired at 98 their face amount. (e) 2,500 shares of common stock were issued at $30 for cash. (f) Cash dividends declared $25,000 (g) Investments of $100,000 were sold for $110,000. Prepare just the Operating section of the statement of cash flows using the indirect method.

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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The comparative balance sheet of Gold Coast Company for Years 1 and 2 ended December 31 appears below in condensed form:
Year 2
Year 1
Cash
$ 64,000
$ 42,500
Accounts receivable (net)
61,000
70,200
Inventories
121,000
105,000
Investments
100,000
Equipment
520,000
425,000
Accumulated depreciation-equipment
(150,000)
(175,000)
$616,000
$567,700
Accounts payable
$44,750
$35,250
Dividends Payable
$15,000
$12,000
Bonds payable
75,000
Common stock, $20 par
375,000
325,000
Premium on common stock
50,000
25,000
131.250
95.450
Retained earnings
$616,000
$567,700
Additional data for the current year are as follows:
(a) Net income, $80,000.
(b) Depreciation reported on income statement, $35,000.
(c) Equipment costing $80,000 that has been depreciated for $60,000 was sold for
$10,000, and new equipment was purchased for $170,000.
(d) Bonds payable for $75,000 were retired at 98 their face amount.
(e) 2,500 shares of common stock were issued at $30 for cash.
(f) Cash dividends declared $25,000
(g) Investments of $100,000 were sold for $110,000.
Prepare just the Operating section of the statement of cash flows using the indirect method.
Transcribed Image Text:The comparative balance sheet of Gold Coast Company for Years 1 and 2 ended December 31 appears below in condensed form: Year 2 Year 1 Cash $ 64,000 $ 42,500 Accounts receivable (net) 61,000 70,200 Inventories 121,000 105,000 Investments 100,000 Equipment 520,000 425,000 Accumulated depreciation-equipment (150,000) (175,000) $616,000 $567,700 Accounts payable $44,750 $35,250 Dividends Payable $15,000 $12,000 Bonds payable 75,000 Common stock, $20 par 375,000 325,000 Premium on common stock 50,000 25,000 131.250 95.450 Retained earnings $616,000 $567,700 Additional data for the current year are as follows: (a) Net income, $80,000. (b) Depreciation reported on income statement, $35,000. (c) Equipment costing $80,000 that has been depreciated for $60,000 was sold for $10,000, and new equipment was purchased for $170,000. (d) Bonds payable for $75,000 were retired at 98 their face amount. (e) 2,500 shares of common stock were issued at $30 for cash. (f) Cash dividends declared $25,000 (g) Investments of $100,000 were sold for $110,000. Prepare just the Operating section of the statement of cash flows using the indirect method.
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