E9-148. Prepare the statement of cash flows using the indirect method. (LO 2, 5)
Use the following information for LAW Office Products and Supplies Inc. to prepare a statement of cash flows for the year ended December 31, 2007, using the indirect method.
|
LAW Office Products and Supplies Inc. Balance Sheet |
||
|
2007 |
2008 |
|
|
Assets |
||
|
Cash |
$ 55,000 |
$ 23,500 |
|
Accounts receivable |
78,000 |
54,000 |
|
Inventories |
180,000 |
169,000 |
|
Land |
135,000 |
105,000 |
|
Equipment |
350,000 |
260,000 |
|
Accumulated depreciation |
(90000) |
(60,000) |
|
Total assets |
$ 708,000 |
$561,500 |
|
Liabilities and Shareholder’s Equity |
||
|
Accounts payable |
$ 35,000 |
$23,500 |
|
Bonds payable |
185,000 |
215,000 |
|
Common stock and additional |
||
|
paid-in capital |
225,0OO |
175,000 |
|
Retained earnings |
263,000 |
131,500 |
|
Total liabilities and shareholder’s equity |
$708,000 |
$561,500 |
Additional information:
a. Net income for the fiscal year ended December 31, 2007, was $145,000
b. The company declared and paid cash dividends.
c. The company redeemed bonds payable amounting to $30,000 for cash of $30,000.
d. The company issued common stock for $50,000 cash.