Condensed financial data of Saffordville Company are shown below.
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SAFFORDVILLE COMPANY Comparative Balance Sheets December 31 |
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Assets |
2014 |
2013 |
|
Cash |
$102,700 |
$ 33,400 |
|
Accounts receivable |
60,800 |
37,000 |
|
Inventory |
126,900 |
102,650 |
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Investments |
79,500 |
107,000 |
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Equipment |
315,000 |
205,000 |
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Accumulated depreciation—equipment |
(44,500) |
(40,000) |
|
Total |
$640,400 |
$445,050 |
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Liabilities and Stockholders” Equity |
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|
Accounts payable |
$ 57,700 |
$ 48,280 |
|
Accrued expenses payable |
15,100 |
18,830 |
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Bonds payable |
145,000 |
70,000 |
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Common stock |
250,000 |
200,000 |
|
Retained earnings |
172,600 |
107,940 |
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Total |
$640,400 |
$445,050 |
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SAFFORDVILLE COMPANY Income Statement For the Year Ended December 31, 2014 |
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Sales revenue |
$297,500 |
|
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Gain on disposal of plant assets |
5,000 |
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|
302,500 |
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Less: |
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Cost of goods sold |
$99,460 |
|
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Operating expenses, excluding depreciation expense |
19,670 |
|
|
Depreciation expense |
30,500 |
|
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Income tax expense |
37,270 |
|
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Interest expense |
2,940 |
189,840 |
|
Net income |
$112,660 |
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Additional information:
- New equipment costing $146,000 was purchased for cash during the year.
- Investments were sold at cost.
- Equipment costing $36,000 was sold for $15,000, resulting in a gain of $5,000.
- A cash dividend of $48,000 was declared and paid during the year.
Instructions
Prepare a statement of cash flows using the indirect method.