Reference no: EM13555792
The comparative balance sheet of Portable Luggage Company at December 31, 2008 and 2007, is as follows:
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|
Dec. 31, 2008
|
Dec. 31, 2007
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|
Assets
|
|
|
|
Cash
|
$ 175,900
|
$ 143,200
|
|
Accounts receivable (net)
|
264,100
|
235,000
|
|
Inventories
|
352,300
|
405,800
|
|
Prepaid expenses
|
12,500
|
10,000
|
|
Land
|
120,000
|
120,000
|
|
Buildings
|
680,000
|
450,000
|
|
Accumulated depreciation-buildings
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(185,000)
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(164,500)
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|
Machinery and equipment
|
310,000
|
310,000
|
|
Accumulated depreciation-machinery & equipment
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(85,000)
|
(76,000)
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|
Patents
|
42,500
|
48,000
|
|
|
$1,687,300
|
$1,481,500
|
|
Liabilities and Stockholders' Equity
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|
|
|
Accounts payable (merchandise creditors)
|
$ 332,300
|
$ 367,900
|
|
Dividends payable
|
13,000
|
10,000
|
|
Salaries payable
|
30,200
|
34,600
|
|
Mortgage note payable, due 2015
|
90,000
|
-
|
|
Bonds payable
|
-
|
154,000
|
|
Common stock, $1 par
|
24,000
|
20,000
|
|
Paid-in capital in excess of par-common stock
|
200,000
|
50,000
|
|
Retained earnings
|
997,800
|
845,000
|
|
|
$1,687,300
|
$1,481,500
|
An examination of the income statement and the accounting records revealed the following additional information applicable to 2008:
a. Net income, $204,800.
b. Depreciation expense reported on the income statement: buildings, $20,500; machinery and equipment, $9,000.
c. Patent amortization reported on the income statement, $5,500.
d. A building was constructed for $230,000.
e. A mortgage note for $90,000 was issued for cash.
f. 4,000 shares of common stock were issued at $38.50 in exchange for the bonds payable.
g. Cash dividends declared, $52,000.
Instructions
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.