pr 23 130 a complex statement of cash flows indirect method the net changes in the b 4339723

 

Pr. 23-130—A complex statement of cash flows (indirect method).

The net changes in the balance sheet accounts of Eusey, Inc. for the year 2011 are shown below:

Account   Debit                                       Credit

Cash$   125,600

Accounts receivable$     64,000

Allowance for doubtful accounts14,000

Inventory217,200

Prepaid expenses20,000

Long-term investments144,000

Land300,000

Buildings600,000

Machinery100,000

Office equipment28,000

Accumulated depreciation:

Buildings24,000

Machinery20,000

Office equipment12,000

Accounts payable183,200

Accrued liabilities72,000

Dividends payable128,000

Premium on bonds32,000

Bonds payable800,000

Preferred stock ($50 par)60,000

Common stock ($10 par)156,000

Additional paid-in capital—common223,200

Retained earnings       87,200

$1,705,200$1,705,200

 

Additional information:

1.                             Income Statement Data for Year Ended December 31, 2011

Income before extraordinary item$272,000

Extraordinary loss:  Condemnation of land  132,000

Net income$140,000

2.              Cash dividends of $128,000 were declared December 15, 2011, payable January 15, 2012. A 5% stock dividend was issued March 31, 2011, when the market value was $22.00 per share.

3.              The long-term investments were sold for $140,000.

4.              A building and land which cost $480,000 and had a book value of $300,000 were sold for $400,000. The cost of the land, included in the cost and book value above, was $20,000.

5.              The following entry was made to record an exchange of an old machine for a new one:

Machinery ……………………………….160,000

Accumulated Depreciation—Machinery………………………40,000

Machinery …………………………………….60,000

Cash 140,000

6.              A fully depreciated copier machine which cost $28,000 was written off.

7.              Preferred stock of $60,000 par value was redeemed for $80,000.

 

Pr. 23-130  (cont.)

8.              The company sold 12,000 shares of its common stock ($10 par) on June 15, 2011 for $25 a share. There were 87,600 shares outstanding on December 31, 2011.

9.              Bonds were sold at 104 on December 31, 2011.

10.              Land that was condemned had a book value of $240,000.

 

Instructions

Prepare a statement of cash flows (indirect method). Ignore tax effects.