Preparing the statement of cash flows—indirect method
This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise 13-36 of Chapter 13. Refer to the comparative balance sheet for Lawlor Lawn Service.
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DRAPER CONSULTING, INC. Comparative Balance Sheet December 31, 2013 and 2012 |
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Assets |
2013 |
2012 |
|
Cash |
$ 514,936 |
$ 16,350 |
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Accounts receivable |
37,500 |
1,750 |
|
Supplies |
2,200 |
200 |
|
Equipment |
16,000 |
1,800 |
|
Furniture |
5,700 |
4,200 |
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Building |
125,000 |
0 |
|
Accumulated depreciation |
(2,753) |
(100) |
|
Total assets |
$ 698,583 |
$ 24,200 |
|
Liabilities |
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Accounts payable |
$ 10,000 |
$ 4,650 |
|
Salary payable |
4,100 |
685 |
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Unearned service revenue |
0 |
700 |
|
Interest payable |
10,667 |
0 |
|
Notes payable |
40,000 |
0 |
|
Bonds payable |
400,000 |
0 |
|
Discount on bonds payable |
(36,184) |
0 |
|
Stockholders’ Equity |
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Common stock |
130,000 |
18,000 |
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Retained earnings |
140,000 |
165 |
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Total liabilities and stockholders’ equity |
$ 698,583 |
$ 24,200 |
Requirement
1. Prepare the statement of cash flows using the indirect method.