The comparative balance sheet of Green Earth Lawn and Garden Inc. for December 31, 2008 and 2009, is as follows:
|
|
Dec. 31, 2009 |
Dec. 31, 2008 |
|
Assets |
|
|
|
Cash |
$ 137,900 |
$142,300 |
|
Accounts receivable (net) |
206,800 |
190,500 |
|
Inventories |
290,500 |
284,100 |
|
Investments |
0 |
90,000 |
|
Land |
200,000 |
0 |
|
Equipment |
255,000 |
205,000 |
|
Accumulated depreciation |
(100,300) |
(76,700) |
|
|
$ 989,900 |
$835,200 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Accounts payable (merchandise creditors) |
$ 224,900 |
$201,400 |
|
Accrued expenses (operating expenses) |
14,100 |
16,500 |
|
Dividends payable |
21,000 |
19,000 |
|
Common stock, $1 par |
10,000 |
8,000 |
|
Paid in capital in excess of par—common stock |
200,000 |
100,000 |
|
Retained earnings |
519,900 |
490,300 |
|
|
$ 989,900 |
$835,200 |
The income statement for the year ended December 31, 2009, is as follows:
|
Sales |
|
$940,000 |
|
Cost of merchandise sold |
|
489,300 |
|
Gross profit |
|
$450,700 |
|
Operating expenses: |
|
|
|
Depreciation expense |
$ 23,600 |
|
|
Other operating expenses |
278,900 |
|
|
Total operating expenses |
|
302,500 |
|
Operating income |
|
$148,200 |
|
Other income: |
|
|
|
Gain on sale of investments |
|
32,000 |
|
Income before income tax |
|
$180,200 |
|
Income tax expense |
|
62,300 |
|
Net income |
|
$117,900 |
The following additional information was taken from the records:
a. Equipment and land were acquired for cash.
b. There were no disposals of equipment during the year.
c. The investments were sold for $122,000 cash.
d. The common stock was issued for cash.
e. There was a $88,300 debit to Retained Earnings for cash dividends declared.
Instructions
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.