Reference no: EM13555748

Statement of cash flows-indirect method

The comparative balance sheet of Beets Industries, Inc. at December 31, 2013 and 2012, is as follows:

	Dec. 31, 2013	Dec. 31, 2012
Assets
Cash	$ 379,920	$ 309,360
Accounts receivable (net)	570,240	507,600
Inventories	761,040	876,480
Prepaid expenses	27,120	21,600
Land	259,200	259,200
Buildings	1,468,800	972,000
Accumulated depreciation-buildings	(399,600)	(355,320)
Machinery and equipment	669,600	669,600
Accumulated depreciation-machinery and equipment	(183,600)	(164,160)
Patents	91,680	103,680
	$3,644,400	$3,200,040
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$ 717,840	$ 794,640
Dividends payable	28,080	21,600
Salaries payable	67,680	74,640
Mortgage note payable, due 2017	192,000	0
Bonds payable	0	336,000
Common stock, $2 par	99,200	43,200
Paid-in capital in excess of par-common stock	388,000	108,000
Retained earnings	2,151,600	1,821,960
	$3,644,400	$3,200,040

An examination of the income statement and the accounting records revealed the following additional information applicable to 2013:

a. Net income, $441,960.

b. Depreciation expense reported on the income statement: buildings, $44,280; machinery and equipment, $19,440.

c. Patent amortization reported on the income statement, $12,000.

d. A building was constructed for $496,800.

e. A mortgage note for $192,000 was issued for cash.

f. 28,000 shares of common stock were issued at $12 in exchange for the bonds payable.

g. Cash dividends declared, $112,320.

Instructions

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