Preparing the statement of cash flows—indirect method
Accountants for Smithson, Inc., have assembled the following data for the year ended December 31, 2012:
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December 31, |
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2012 |
2011 |
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Current Accounts: |
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Current assets: |
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Cash and cash equivalents |
$ 106,100 |
$ 26,000 |
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Accounts receivable |
64,300 |
68,900 |
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Inventories |
80,000 |
75,000 |
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Current liabilities: |
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Accounts payable |
57,700 |
56,100 |
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Income tax payable |
14,500 |
17,000 |
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Transaction Data for 2012: |
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Issuance of common stock for cash |
$ 45,000 |
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Depreciation expense |
18,000 |
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Purchase of equipment |
70,000 |
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Acquisition of land by issuing long-term note payable |
113,000 |
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Payment of note payable |
$46,100 |
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Payment of cash dividends |
52,000 |
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Issuance of note payable to borrow cash |
68,000 |
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Gain on sale of building |
3,500 |
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Net income |
68,500 |
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Cost basis of building sold |
$50,000 |
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Requirement
1. Prepare Smithson’s statement of cash flows using the indirect method. Include an accompanying schedule of noncash investing and financing activities.