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 Retained earnings 131,250 95,450 $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.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

Related questions

Question

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
Retained earnings	131,250	95,450
	$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.