Method of reporting cash flows from operating activities

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Reference no: EM13760345

On the basis of the following data for Teller Co. for 2006 and the preceding year ended December 31, 2005, prepare a statement of cash flows in excel. Use the indirect method of reporting cash flows from operating activities.

Additional Information

1) Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000;

2) The stock was issued for cash;

3) The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.

Balance Sheet:

	Year	Year
	2006	2005
Cash	$100,000	$ 78,000
Accounts receivable (net)	78,000	85,000
Inventories	101,500	90,000
Equipment	410,000	370,000
Accumulated depreciation	(150,000)	(158,000)
	$539,500	$465,000
	========	========

Accounts payable (merchandise creditors)	$ 58,500	$ 55,000
Cash dividends payable	5,000	4,000
Common stock, $10 par	200,000	170,000
Paid-in capital in excess of par--common stock	62,000	60,000
Retained earnings	214,000	176,000
	$539,500	$465,000
	========	========

Reference no: EM13760345

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