Chapter 14, Problem 1R

The comparative balance sheet of Prime Sports Gear, Inc., at December 31, the end of the fiscal year, is as follows:

Additional data obtained from the records of Prime Sports Gear are as follows:

1. a. Net income for 2013 was $121,610.
2. b. Depreciation reported on income statement for 2013 was $46,500.
3. c. Purchased $165,000 of new equipment, putting $90,000 cash down and issuing $75,000 of bonds for the balance.
4. d. Old equipment originally costing $19,500, with accumulated depreciation of $7,950, was sold for $8,000.
5. e. Retired $60,000 of bonds.
6. f. Declared cash dividends of $64,000.
7. g. Issued 1,500 shares of common stock at $27 cash per share.

You have been asked to prepare a statement of cash flows for Prime Sports Gear for 2013. Review the worksheet called CASHFLOW that has been provided to assist you in preparing the statement. The worksheet has been designed so that as you make entries in columns D and F, column G will be automatically updated. For example, FORMULA1 should be entered as =B17+D17–F17. Columns C and E are to be used to enter letter references for each of the debit and credit entries on the worksheet.

To determine

Prepare the statement of cash flow for Incorporation PSG and review the worksheet.

Explanation of Solution

Prepare the statement of cash flow for Incorporation PSG and review the worksheet.

Table (1)