Prepare the statement of cash flows on indirect bases

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Reference no: EM131095708

Below are the balance sheets and income statement for Kinder Care Company. Please prepare the statement of cash flows for 2015 on both the indirect and direct bases.

Kinder Care Company
Balance Sheet


December 31


2015

2014

Cash

135,900

111,200

Accounts receivable (net)

38,300

20,300

Inventory

35,000

26,000

Long-term investments

-

20,000

Property, plant & equipment

216,500

150,000

Accumulated depreciation

(57,700)

(25,000)


368,000

302,500

Accounts payable

17,000

35,500

Accrued liabilities

21,000

27,000

Long-term notes payable

70,000

50,000

Common stock

185,000

145,000

Retained earnings

75,000

45,000


368,000

302,500

Sales Revenue

$ 512,000

Cost of goods sold

291,000

Gross margin

221,000

Operating expenses

91,500

Pre-tax operating income

129,500

Gain on sale of investments

15,000

Pre-tax income

144,500

Tax

42,000

Net income

$ 102,500

Additional data:

1 Depreciation on plant assets for the year, $32,700.

2 Sold the long-term investments for $35,000.

3 Purchased machinery costing $66,500, issued note for $20,000 and paid remainder in cash.

4 Paid a $40,000 long-term note payable by issuing common stock.

5 Issued additional long-term notes payable during the year.

Reference no: EM131095708

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