The following financial statements were drawn from the records of Healthy Products Co. Assets Cash Balance Sheets As of December 31 Accounts receivable Inventory Equipment Accumulated depreciation equipment Land Total assets Liabilities and stockholders' equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and stockholders' equity Sales revenue Cost of goods sold Gross margin Income Statement For the Year Ended December 31, 2012 Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income 2012 $16,120 2,400 2,000 13,700 (11,300) 13,000 $35,920 $3,600 3,200 17,000 12,120 $35,920 $17,480 (6,200) Required Prepare a statement of cash flows using the indirect method. 11,280 (1,750) 9,530 1,800 (600) $10,730 2011 $ 1,940 2,000 2,600 17,100 (12,950) 8,000 $18,690 $ 2,400 4,000 10,000 2,290 $18,690 Additional Data 1. During 2012, the company sold equipment for $6,800; it had originally cost $8,400. Accumu- lated depreciation on this equipment was $3,400 at the time of the sale. Also, the company purchased equipment for $5,000 cash. 2. The company sold land that had cost $2,000. This land was sold for $1,400, resulting in the recognition of a $600 loss. Also, common stock was issued in exchange for title to land that was valued at $7,000 at the time of exchange. 3. Paid dividends of $900.
The following financial statements were drawn from the records of Healthy Products Co. Assets Cash Balance Sheets As of December 31 Accounts receivable Inventory Equipment Accumulated depreciation equipment Land Total assets Liabilities and stockholders' equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and stockholders' equity Sales revenue Cost of goods sold Gross margin Income Statement For the Year Ended December 31, 2012 Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income 2012 $16,120 2,400 2,000 13,700 (11,300) 13,000 $35,920 $3,600 3,200 17,000 12,120 $35,920 $17,480 (6,200) Required Prepare a statement of cash flows using the indirect method. 11,280 (1,750) 9,530 1,800 (600) $10,730 2011 $ 1,940 2,000 2,600 17,100 (12,950) 8,000 $18,690 $ 2,400 4,000 10,000 2,290 $18,690 Additional Data 1. During 2012, the company sold equipment for $6,800; it had originally cost $8,400. Accumu- lated depreciation on this equipment was $3,400 at the time of the sale. Also, the company purchased equipment for $5,000 cash. 2. The company sold land that had cost $2,000. This land was sold for $1,400, resulting in the recognition of a $600 loss. Also, common stock was issued in exchange for title to land that was valued at $7,000 at the time of exchange. 3. Paid dividends of $900.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 12-18B Using financial statements to prepare a statement of cash flows-
Indirect method
The following financial statements were drawn from the records of Healthy Products Co.
Assets
Cash
Balance Sheets
As of December 31
Accounts receivable
Inventory
Equipment
Accumulated depreciation-equipment
Land
Total assets
Liabilities and stockholders' equity
Accounts payable (inventory)
Long-term debt
Common stock
Retained earnings
Total liabilities and stockholders' equity
Sales revenue
Cost of goods sold
Gross margin
Depreciation expense
Income Statement
For the Year Ended December 31, 2012
Operating income
Gain on sale of equipment
Loss on disposal of land
Net income
2012
$16,120
2,400
2,000
13,700
(11,300)
13,000
$35,920
$3,600
3,200
17,000
12,120
$35,920
Required
Prepare a statement of cash flows using the indirect method.
$17,480
(6,200)
11,280
(1,750)
9,530
1,800
(600)
$10,730
2011
$ 1,940
2,000
2,600
17,100
(12,950)
8,000
$18,690
$ 2,400
4,000
10,000
2,290
$18,690
Additional Data
1. During 2012, the company sold equipment for $6,800; it had originally cost $8,400. Accumu-
lated depreciation on this equipment was $3,400 at the time of the sale. Also, the company
purchased equipment for $5,000 cash.
2. The company sold land that had cost $2,000. This land was sold for $1,400, resulting in the
recognition of a $600 loss. Also, common stock was issued in exchange for title to land that
was valued at $7,000 at the time of exchange.
3. Paid dividends of $900.
LO 1, 3, 4
B
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