Reference no: EM13534300

Statement of cash flows-indirect method

The comparative balance sheet of Hinson Enterprises, Inc. at December 31, 2013 and 2012, is as follows

	Dec. 31, 2013	Dec. 31, 2012
Assets
Cash	$ 128,275	$ 157,325
Accounts receivable (net)	196,525	211,750
Merchandise inventory	281,400	261,800
Prepaid expenses	11,725	8,400
Equipment	573,125	469,875
Accumulated depreciation-equipment	(149,450)	(115,675)
	$1,041,600	$ 993,475
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$ 218,925	$ 207,900
Mortgage note payable	0	294,000
Common stock, $1 par	91,000	21,000
Paid-in capital in excess of par-common stock	455,000	280,000
Retained earnings	276,675	190,575
	$1,041,600	$ 993,475

c

a. Net income, $220,500.

b. Depreciation reported on the income statement, $72,975.

c. Equipment was purchased at a cost of $142,450, and fully depreciated equipmentc osting $39,200 was discarded, with no salvage realized.

d. The mortgage note payable was not due until 2014, but the terms permitted earlier payment without penalty.

e. 7,000 shares of common stock were issued at $35 for cash.

f. Cash dividends declared and paid, $134,400.

Instructions

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.