JEM Company’s comparative balance sheets for 2002 and 2003 are provided.
|
2003 |
2002 |
|
|
Assets |
||
|
Cash and cash equivalents |
$ 30,500 |
$ 10,000 |
|
Accounts receivable (net) |
64,500 |
51,000 |
|
Inventory |
100,000 |
115,000 |
|
Equipment. |
55,000 |
30,000 |
|
Accumulated depreciation—equipment |
(21,500) |
(14,000) |
|
Total assets |
$228,500 |
$192,000 |
|
Liabilities and Stockholders’ Equity |
||
|
Accounts payable |
$ 52,500 |
$ 46,000 |
|
Long term notes payable. |
70,000 |
50,000 |
|
Capital stock |
60,000 |
60,000 |
|
Retained earnings |
46,000 |
36,000 |
|
Total liabilities and stockholders’ equity. |
$228,500 |
$192,000 |
The following additional information is available:
a.Net income for the year 2003 (as reported on the income statement) was $50,000.
b.Dividends of $40,000 were declared and paid.
c.Equipment that cost $8,000 and had a book value of $1,000 was sold during the year for $2,500.
Required
Based on the information provided, prepare a statement of cash flows for JEM Company for the year ended December 31, 2003. Use the indirect method to report cash flows from operating activities.