(SCF—Indirect Method and Balance Sheet) Ochoa Inc., had the following condensed balance sheet at the end of operations for 2011.
|
OCHOA INC. |
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|
Cash |
$ 8,500 |
Current liabilities |
$ 15,000 |
|
Current assets other than cash |
29,000 |
Long-term notes payable |
25,500 |
|
Investments |
20,000 |
Bonds payable |
25,000 |
|
Plant assets (net) |
67,500 |
Common stock |
75,000 |
|
Land |
40,000 |
Retained earnings |
24,500 |
|
$165,000 |
$165,000 |
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During 2012, the following occurred.
1. A tract of land was purchased for $11,000.
2. Bonds payable in the amount of $20,000 were retired at par.
3. An additional $10,000 in common stock was issued at par.
4. Dividends totaling $9,375 were paid to stockholders.
5. Net income was $30,250 after deducting depreciation of $13,500.
6. Land was purchased through the issuance of $22,500 in bonds.
7. Ochoa Inc. sold part of its investment portfolio for $12,875. This transaction resulted in a gain of $2,000 for the company. The company classifies the investments as available-for-sale.
8. Both current assets (other than cash) and current liabilities remained at the same amount.
Instructions
(a) Prepare a statement of cash flows for 2012 using the indirect method.
(b) Prepare the condensed balance sheet for Ochoa Inc. as it would appear at December 31, 2012.