Statement of cash flows-indirect methodThe comparative balance sheet of Livers Inc. for December 31, 2013 and20Y2, is shown as follows: Additional data obtained from an examination of the accounts in theledger for 2013 are as follows:A. The investments were sold for $175,000 cash.B. Equipment and land were acquired for cash.C. There were no disposals of equipment during the year.D. The common stock was issued for cash.E. There was a $500,000 credit to Retained Earnings for net income.F. There was a $90,000 debit to Retained Earnings for cashdividends declared.InstructionsPrepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Dec. 31,Dec. 31,20Υ320Υ2AssetsCash$ 155,000$ 150,000Accounts receivable (net)| 450,000400,000Inventories770,000750,000Investments100,000Land500,000Equipment1,400,000 1,200,000Accumulated depreciation-equipment|(600,000) (500,000)Total assets$2,675,000 $2,100,000Liabilities and Stockholders' EquityAccounts payable (merchandise creditors)$ 340,000$ 300,000Accrued expenses payable (operatingexpenses)| 45,00050,000Dividends payable30,00025,000Common stock. $4 par700,000600,000Paid-in capital: Excess of issue price over par|200,000175,000-common stockRetained earnings1,360,000 950,000Total liabilities and stockholders' equity$2,675,000 $2,100,000

Cash flow statement is a statement which shows all cash inflows and cash outflows related to…

Answered: Dec. 31, Dec. 31, 20Υ3 20Υ2 Assets Cash…

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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Statement of cash flows-indirect method
The comparative balance sheet of Livers Inc. for December 31, 2013 and
20Y2, is shown as follows:

Additional data obtained from an examination of the accounts in the
ledger for 2013 are as follows:
A. The investments were sold for $175,000 cash.

B. Equipment and land were acquired for cash.
C. There were no disposals of equipment during the year.
D. The common stock was issued for cash.
E. There was a $500,000 credit to Retained Earnings for net income.
F. There was a $90,000 debit to Retained Earnings for cash
dividends declared.

Instructions
Prepare a statement of cash flows, using the indirect method of
presenting cash flows from operating activities.

Dec. 31,
Dec. 31,
20Υ3
20Υ2
Assets
Cash
$ 155,000
$ 150,000
Accounts receivable (net)
| 450,000
400,000
Inventories
770,000
750,000
Investments
100,000
Land
500,000
Equipment
1,400,000 1,200,000
Accumulated depreciation-equipment
|(600,000) (500,000)
Total assets
$2,675,000 $2,100,000
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)
$ 340,000
$ 300,000
Accrued expenses payable (operating
expenses)
| 45,000
50,000
Dividends payable
30,000
25,000
Common stock. $4 par
700,000
600,000
Paid-in capital: Excess of issue price over par
|200,000
175,000
-common stock
Retained earnings
1,360,000 950,000
Total liabilities and stockholders' equity
$2,675,000 $2,100,000

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