Question

ICE Drilling Inc.’s balance sheet information and income statement are as follows:


Additional information regarding ICE Drilling’s activities during 2014:
1. Loss on sale of equipment is $11,480.
2. Paid $70,280 to reduce a long-term note payable.
3. Equipment costing $105,000, with accumulated depreciation of $63,000, is sold for cash.
4. Equipment costing $215,880 is purchased by paying cash of $56,000 and signing a long-term note payable for the balance.
5. Borrowed $8,400 by signing a short-term note payable.
6. Issued 5,600 common shares for cash at $18 per share.
7. Declared and paid cash dividends of $139,160.

Required
Prepare a statement of cash flows for 2014 that reports the cash inflows and outflows from operating activities according to the indirect method. Show your supporting calculations. Also prepare a note describing non-cash investing and financing activities.
Analysis Component: Merchandise Inventory, Prepaid Expenses, Long-Term Notes Payable, and Common Shares are some of the accounts that changed during 2014. Explain what transactions likely caused each of these accounts to increase and/ordecrease.


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  • CreatedJanuary 08, 2015
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