The comparative balance sheet of Portable Luggage Company at December 31, 2008 and 2007, is as follows:
|
|
Dec. 31, 2008 |
Dec. 31, 2007 |
|
Assets |
|
|
|
Cash |
$ 175,900 |
$ 143,200 |
|
Accounts receivable (net) |
264,100 |
235,000 |
|
Inventories |
352,300 |
405,800 |
|
Prepaid expenses |
12,500 |
10,000 |
|
Land |
120,000 |
120,000 |
|
Buildings |
680,000 |
450,000 |
|
Accumulated depreciation—buildings |
(185,000) |
(164,500) |
|
Machinery and equipment |
310,000 |
310,000 |
|
Accumulated depreciation—machinery & equipment |
(85,000) |
(76,000) |
|
Patents |
42,500 |
48,000 |
|
|
$1,687,300 |
$1,481,500 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Accounts payable (merchandise creditors) |
$ 332,300 |
$ 367,900 |
|
Dividends payable |
13,000 |
10,000 |
|
Salaries payable |
30,200 |
34,600 |
|
Mortgage note payable, due 2015 |
90,000 |
— |
|
Bonds payable |
— |
154,000 |
|
Common stock, $1 par |
24,000 |
20,000 |
|
Paid in capital in excess of par—common stock |
200,000 |
50,000 |
|
Retained earnings |
997,800 |
845,000 |
|
|
$1,687,300 |
$1,481,500 |
An examination of the income statement and the accounting records revealed the following additional information applicable to 2008:
a. Net income, $204,800.
b. Depreciation expense reported on the income statement: buildings, $20,500; machinery and equipment, $9,000.
c. Patent amortization reported on the income statement, $5,500.
d. A building was constructed for $230,000.
e. A mortgage note for $90,000 was issued for cash.
f. 4,000 shares of common stock were issued at $38.50 in exchange for the bonds payable.
g. Cash dividends declared, $52,000.
Instructions
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.