Prepare the statement of cash flows

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Reference no: EM131782802

The balance sheet and the income statement for the year ended December 31, 2016 for Johnson Inc. follows. During 2016, cash of 15,000 was paid for building and equipment, 10,000 was paid for retirement of notes payable, and $68,000.was paid for cash dividends. . During 2016, cash was received from issuance of stock.

Balance Sheet

As of December, 31.

 

2016

2015

Cash

$ 25,000

$ 20,000

Accounts receivable, net

60,000

70,000

Inventory

80,000

100,000

Land

50,000

50,000

Building and equipment

130,000*

115,000

Accumulated depreciation

(85,000)

(70,000)

Total assets

$260,000

$285,000

 

 

 

Accounts payable

$ 30,000

$ 35,000

Income taxes payable

4,000

3,000

Wages payable

5,000

3,000

Current notes payable

50,000**

60,000

Common stock

110,000***

100,000

Retained earnings

61,000

84,000

Total liabilities and stockholders's equity

$260,000

$285,000

 

Income Statement

For the Year Ended December 31, 2016

 

Sales

 

$500,000

Less expenses:

 

 

Cost of goods sold

$330,000

 

Selling and administrative expenses

90,000

 

(includes depreciation of $15,000)

 

 

Interest expense

5,000

 

Total expenses

 

425,000

Income before taxes

 

$ 75,000

Income tax expense

 

30,000

Net income

 

$ 45,000

(Required) Prepare the statement of cash flows for 2016. Present cash flows from operations using the indirect approach.

Reference no: EM131782802

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