The comparative balance sheet of Sky-Mate Luggage Company at December 31, 2007 and 2006, is as follows: An examination of the income statement and the accounting records revealed the following additional information applicable to 2007: a. Net income, $140,500. b. Depreciation expense reported on the income statement: buildings, $21,000; machinery and equipment, $8,500. c. Patent amortization reported on the income statement, $4,000. d. A building was constructed for $175,000. e. A mortgage note for $70,000 was issued for cash. f. 2,000 shares of common stock were issued at $51 in exchange for the bonds payable. g. Cash dividends declared, $60,000. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question

The comparative balance sheet of Sky-Mate Luggage Company at December 31, 2007 and 2006, is as follows:

An examination of the income statement and the accounting records revealed the following additional information applicable to 2007:

a. Net income, $140,500.

b. Depreciation expense reported on the income statement: buildings, $21,000; machinery and equipment, $8,500.

c. Patent amortization reported on the income statement, $4,000.

d. A building was constructed for $175,000.

e. A mortgage note for $70,000 was issued for cash.

f. 2,000 shares of common stock were issued at $51 in exchange for the bonds payable.

g. Cash dividends declared, $60,000. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

 

Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Financial Statements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education