Preparing a Statement of Cash Flows
The following are comparative balance sheets for the Paulino Corporation for 2000 and 1999 and the income statement for the year ended December 31, 2000:
|
Paulino Corporation Comparative Balance Sheets December 31 |
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|
Assets |
2000 |
1999 |
|
Cash |
$ 89,000 |
$ 60,000 |
|
Accounts receivable |
65,000 |
50,000 |
|
Inventory |
200,000 |
90,000 |
|
Land |
100,000 |
225,000 |
|
Equipment, net |
371,000 |
380,000 |
|
$825,000 |
$805,000 |
|
|
Liabilities and Shareholders’ Equity |
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|
Accounts payable |
54,000 |
32,000 |
|
Dividends payable |
15,000 |
0 |
|
Interest payable |
6,000 |
8,000 |
|
Mortgage payable |
130,000 |
305,000 |
|
Invested Capital |
capital280,000 |
280,000 |
|
Retained earnings |
340,000 |
180,000 |
|
$825,000 |
$805,000 |
|
|
Paulino Corporation Income Statement For the Year Ended December 31, 2000 |
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|
Sales |
$1,200,000 |
|
|
Cost of goods sold |
(720,000) |
|
|
Gross profit |
480,000 |
|
|
Operating and other expenses |
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|
Depreciation |
(9,000) |
|
|
Other operating expenses |
(275,000) |
|
|
Gain on sale of land |
15,000 |
|
|
Interest expense |
(10,000) |
(279,000) |
|
Net income |
$ 201,000 |
|
Additional Information:
1. Dividends declared during the year were $41,000.
2. Land at a cost of $125,000 was sold for $140,000.
3. The only change in equipment was the depreciation expense.
4. All other balance sheet account changes are from normal transactions.
Required
Use the direct method to prepare a statement of cash flows for Paulino Corporation.