statement of cash flows_06Jan
1.) Prepare a statement of cash flows using the indirect method for the year ending December 31, 2011.
Balance Sheet
| 2011 | 2010 | |
| Cash | $ 18,000 | $25,000 |
| Supplies | 10,000 | 12,000 |
| Accounts receivable (net) | 31,000 | 35,000 |
| Inventory | 51,000 | 52,000 |
| Prepaid expenses | 9,000 | 3,000 |
| Buildings, and equipment | 400,000 | 360,000 |
| Less: accumulated depreciation | (100,000) | (75,000) |
| Total assets | $419,000 | $412,000 |
| Accounts payable | $18,000 | $13,000 |
| Accrued expenses | 10,000 | 8,500 |
| Note payable, Short Term | 20,000 | 60,000 |
| Note payable, Long Term | 20,000 | 15,500 |
| Capital stock | 296,000 | 280,000 |
| Retained earnings | 55,000 | 35,000 |
| Total liabilities and equities | $419,000 | $412,000 |
Additional data:
One piece of equipment was purchased during the year.
Short term debt was repaid while long term debt was issued.
Dividends were paid during the year.
A condensed income statement for the year is as follows:
| Sales | 470,000 |
| Cost of goods sold | 220,000 |
| Gross profit | 250,000 |
| Depreciation expense | 25,000 |
| Operating expenses, other | 138,000 |
| Operating income | 87,000 |
| Interest Expense | (2,000) |
| Net income | 85,000 |