1. The income statement for Kosinski Manufacturing Company contains the following condensed information.
KOSINSKI MANUFACTURING COMPANY
Income Statement
For the Year Ended December 31, 2012
|
Sales revenue |
$6,583,000 |
|
|
Operating expenses, excluding depreciation |
$4,920,000 |
|
|
Depreciation expense |
880,000 |
5,800,000 |
|
Income before income taxes |
783,000 |
|
|
Income tax expense |
353,000 |
|
|
Net income |
$ 430,000 |
Included in operating expenses is a $24,000 loss resulting from the sale of machinery for $270,000 cash. Machinery was purchased at a cost of $750,000. The following balances are reported on Kosinski’s comparative balance sheet at December 31.
KOSINSKI MANUFACTURING COMPANY
Comparative Balance Sheets (partial)
|
2012 |
2011 |
|
|
Cash |
$672,000 |
$130,000 |
|
Accounts receivable |
775,000 |
610,000 |
|
Inventory |
834,000 |
867,000 |
|
Accounts payable |
521,000 |
501,000 |
Income tax expense of $353,000 represents the amount paid in 2012. Dividends declared and paid in 2012 totaled $200,000.
Instructions
Prepare the statement of cash flows using the direct method.