Statement of Cash Flows—Indirect Method
Comparative balance sheet data for the partnership of Bond and Wallin follow.
|
|
Dec 31, 2008 |
Dec 31, 2007 |
|
Cash |
$ 15,000 |
$ 12,500 |
|
Accounts receivable |
24,200 |
27,000 |
|
Inventory |
105,400 |
91,000 |
|
Prepaid expenses |
4,100 |
5,350 |
|
Furniture and fixtures |
65,500 |
41,000 |
|
Accumulated depreciation |
(40,250) |
(25,250) |
|
Total assets |
$173,950 |
$151,600 |
|
Accrued expenses |
$ 9,000 |
$ 6,700 |
|
Accounts payable |
22,425 |
32,875 |
|
Long term note |
21,300 |
— |
|
Ryan Bond, capital |
69,350 |
56,150 |
|
Trent Wallin, capital |
51,875 |
55,875 |
|
Total liabilities and stockholders’ equity |
$173,950 |
$151,600 |
Net income for the year was $22,000, and this was transferred in equal amounts to the partners’ capital accounts. Additional changes in the capital accounts arose from additional investments and withDr.awals by the partners. The change in the furniture and fixtures account arose from a purchase of additional furniture; part of the purchase price was paid in cash, and a long term note was issued for the balance.
Instructions: Using the indirect method, prepare a statement of cash flows for 2008.