Reference no: EM13918128
The following financial statements were drawn from the records of Boston Materials, Inc.:
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Income Statement:
For the Year Ended December 31, 2014
Sales revenue ....... $450,000
Cost of goods sold ...... (212,000)
Gross margin ........ 238,000
Operating expenses:
Salary expense ........ (96,000)
Depreciation expense .... (18,500)
Utilities expense ....... (7,500)
Operating income ...... 116,000
Non operating items:
Interest expense ....... (3,500)
Gain on sale of equipment ... 1,500
Net income ........ $114,000
Additional Information:
1. Sold equipment costing $48,000 with accumulated depreciation of $26,000 for $23,500 cash.
2. Paid a $50,000 cash dividend to owners.
Required:
Analyze the data and prepare a statement of cash flows using the direct method.