Statement of cash flows—direct method Blake Weaver, Cook Enterprises” controller, is preparing the financial statements for 2010. He has completed the comparative balance sheets and income statement, which follow, and has gathered this additional information:
- On December 31, 2010, Cook sold a piece of equipment with an original cost of $25,000 for $30,000 cash. The equipment had a book value of $13,000.
- On February 1, 2010, Cook issued $100,000 of common stock to raise cash in anticipation of the purchase of a new building later in the year.
- On February 2, 2010, Cook took out a ten-year $75,000 long-term loan to provide the remaining funds needed to purchase the building.
- On May 15, 2010, Cook paid $150,000 for the new building.
- The company repaid $4,600 of the long-term debt before the end of the year.
- Cook Enterprises
Income Statement
For the Year Ended December 31, 2010
|
Sales revenue |
|
51,070,000 |
|
Gain on equipment sale |
|
17,003 |
|
Total revenue |
|
1,087,000 |
|
Cost of goods sold |
|
700,000 |
|
Operating expenses |
|
|
|
Depreciation expense |
5 30,000 |
|
|
Interest expense |
7,400 |
|
|
Wages expenses |
175,000 |
|
|
Other expenses |
16,000 |
228,400 |
|
Income before taxes |
|
158,600 |
|
Tax expense |
|
63,400 |
|
Net income |
|
$95,200 |
- Cook Enterprises
Comparative Balance Sheets
As of December 31
|
|
2010 |
2009 |
|
Cash |
5124.200 |
5 40,403 |
|
Accounts receivable, net |
287.200 |
269,803 |
|
Inventory |
125.000 |
95,000 |
|
Total current assets |
536,400 |
405,200 |
|
Property plant, & equipment |
297,000 |
160,000 |
|
Accumulated depreciation |
90,000 |
60,030 |
|
Net property, plant, & equipment |
207.000 |
100,000 |
|
Total assets |
5743,400 |
5505,200 |
|
Accounts payable |
$103,000 |
5120,000 |
|
Wages payable |
27,000 |
30,000 |
|
Accrued liabilities |
20,000 |
25,000 |
|
Taxes payable |
17,600 |
20,003 |
|
Mortgage payable |
70,400 |
0 |
|
Total liabilities |
238,000 |
195,003 |
|
Common stock |
350,000 |
250.000 |
|
Retained earnings |
155,400 |
60,200 |
|
Total stockholders” equity |
505,400 |
310,200 |
|
Total liabilities & stockholders” equity |
$743,400 |
5505,200 |
Required
Using the direct method, prepare Cook Enterprises” statement of cash flows for 2010.