Prepare a statement of cash flows for the year ended

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Reference no: EM131599025

Problem - Wheelhorse Products' comparative balance sheets are presented below.

Wheelhorse Products Inc. Comparative Balance Sheets 31-Dec


2015

2014

Cash

$24,680

$10,820

Accounts receivable

22,000

23,630

Prepaid Insurance

2,800

2,400

Land

14,540

15,410

Buildings

58,000

42,400

Accumulated depreciation-buildings

      (15,200)

      (12,790)

Total

$106,820

$81,870




Accounts payable

$12,520

$8,945

Unearned revenue

$2,400

$18,000

Common stock

50,000

20,000

Retained earnings

41,900

34,925

Total

$106,820

$81,870

 

Additional information: Net income was $18,475. Dividends declared and paid were $11,500.  All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $20,000.
                               
Required: Prepare a statement of cash flows for the year ended December 31, 2015 using the indirect method.  (Hint:  for any accounts where the balance changed, create a T account or record other analysis for your review.  You might make a column of changes, so you can see if a balance increased or decreased and by how much. You do not need to turn this in but you can. You may wish to use Excel for this problem. Copy and paste the balance sheet into your Excel file.  If you use Excel you can submit a separate file for the statement of cash flow problem.

Reference no: EM131599025

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