Question

Jane Bahr, a controller of Endicott & Thurston, prepared the following balance sheets at the end of 2011 and 2010:
Additional information:
1. Computing equipment with a cost of $250,000 and accumulated depreciation of $230,000 was sold for $5,000. New computing equipment was purchased for $376,000. 2. New office furniture was purchased at a cost of $35,000.
3. Depreciation expense for 2011 was $42,000.
4. Investments costing $20,000 were sold for cash at a loss of $2,000. Additional investments were purchased for $31,000 cash.
5. A $25,000 principal payment on the long-term note was made during 2011.
6. A portion of the cash needed to purchase computing equipment was secured by issuing bonds payable for $140,000 cash.
7. Net income was $70,000 and dividends were $38,000.

Required:
1. Using a spreadsheet, prepare a statement of cash flows for 2011. Assume Endicott & Thurston use the indirect method.
2. Discuss whether Endicott & Thurston appear to have matched the timing of inflows and outflows of cash.


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  • CreatedSeptember 22, 2015
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