PR 16-5B Statement of cash flows—direct method applied to PR 16-1B
The comparative balance sheet of Juras Equipment Co. for Dec. 31, 2013 and 2012, is:
|
Dec. 31, 2013 |
Dec. 31, 2012 |
|
|
Assets |
||
|
Cash |
$ 99,840 |
$ 67,680 |
|
Accounts receivable (net) |
292,560 |
265,680 |
|
Inventories |
421,440 |
409,200 |
|
Investments |
0 |
144,000 |
|
Land |
417,600 |
0 |
|
Equipment |
619,200 |
505,440 |
|
Accumulated depreciation |
(139,920) |
(119,040) |
|
$1,710,720 |
$1,272,960 |
|
|
Liabilities and Stockholders’ Equity |
||
|
Accounts payable (merchandise creditors) |
$ 290,400 |
$ 274,080 |
|
Accrued expenses payable (operating expenses) |
43,200 |
37,920 |
|
Dividends payable |
36,000 |
28,800 |
|
Common stock, $1 par |
162,000 |
144,000 |
|
Paid-in capital in excess of par—common stock |
594,000 |
288,000 |
|
Retained earnings |
585,120 |
500,160 |
|
$1,710,720 |
$1,272,960 |
The income statement for the year ended December 31, 2013, is as follows:
|
Sales |
$3,246,048 |
|
|
Cost of merchandise sold |
1,997,568 |
|
|
Gross profit |
$1,248,480 |
|
|
Operating expenses: |
||
|
Depreciation expense |
$ 20,880 |
|
|
Other operating expenses |
831,600 |
|
|
Total operating expenses |
852,480 |
|
|
Operating income |
$ 396,000 |
|
|
Other expenses: |
||
|
Loss on sale of investments |
(14,400) |
|
|
Income before income tax |
$ 381,600 |
|
|
Income tax expense |
152,640 |
|
|
Net income |
$ 228,960 |
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 $129,600 cash.
d. The common stock was issued for cash.
e. There was a $144,000 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.