Statement of cash flows—indirect method Blake Weaver, Cook Enterprises” controller, is preparing the financial statements for I 2010. He has completed the comparative balance sheets and income statement, which follow, and has gathered this additional information:
- On December 31, 2010, Cook sold a piece of equipment with an original cost of $25,000 for $30,000 cash. The equipment had a book value of $13,000.
- On February 1, 2010, Cook issued $100,000 of common stock to raise cash in anticipation of the purchase of a new building later in the year.
- On February 2, 2010, Cook took out a ten-year $75,000 long-term loan to provide the remaining funds needed to purchase the building.
- On May 15, 2010, Cook paid $150,000 for the new building.
- The company repaid $4,600 of the long-term debt before the end of the year.
- Cook Enterprises
Income Statement
For the Year Ended December 31, 2010
|
Sales revenue |
|
$1,070,000 |
|
Gain on equipment sale |
|
17,000 |
|
Total revenue |
|
1,087,000 |
|
Cost of goods sold |
|
700,000 |
|
Operating expenses |
|
|
|
Depreciation expense |
$30,000 |
|
|
Interest expense |
7,400 |
|
|
Wages expenses |
175,000 |
|
|
Other expenses |
16,000 |
228,400 |
|
Income before taxes |
|
158,600 |
|
Tax expense |
|
63,400 |
|
Net income |
|
$95,200 |
- Cook Enterprises
Comparative Balance Sheets
As of December 31
|
|
2010 |
2009 |
|
Cash |
$124,200 |
$ 40,400 |
|
Accounts receivable, net |
287,200 |
269,800 |
|
Inventory |
125,000 |
95,000 |
|
Total current assets |
536,400 |
405,200 |
|
Property, plant, & equipment |
297,000 |
160,000 |
|
Accumulated depreciation |
90,000 |
60,000 |
|
Net property, plant, & equipment |
207,000 |
100,000 |
|
Total assets |
$743,400 |
$505,200 |
|
Accounts payable |
|
|
|
$150,000 |
$175,000 |
|
|
Taxes payable |
17,600 |
20,000 |
|
Mortgage payable |
70,400 |
0 |
|
Total liabilities |
238,000 |
195,000 |
|
Common stock |
350,000 |
250,000 |
|
Retained earnings |
155,400 |
60,200 |
|
Total stockholders” equity |
505,400 |
310,200 |
|
Total liabilities & stockholders” equity |
$743,400 |
$505,200 |
Required
Using the indirect method, prepare Cook Enterprises” statement of cash flows for 2010.