Prepare statement of cash flows using the indirect method. The income statement for 2012 and the balance
Question:
Additional information follows:
a. Sold plant asset for $4,100. Original cost of this plant asset was $10,800 and it had
$9,200 of accumulated depreciation associated with it.
b. Paid $5,500 on the bonds payable; issued $47,500 of new bonds payable.
c. Declared and paid cash dividends of $15,200.
d. Purchased new investment for $20,000.
e. Purchased new equipment for $40,800.
Requirement
Prepare a statement of cash flows for Gibson Industries, Inc., for the year ended December 31, 2012, using the indirect method.
Transcribed Image Text:
Gibson Industries, Inc. Income Statement For Year Ended December 31, 2012 Sales revenue $958,000 386,000 $572,000 Cost of goods Gross pr Operating expenses: Salaries and wage expense Insurance expense Depreciation expense Other operating expenses $184,000 11,500 46,200 88,000 329,700 Operating income $242,300 Other income and expenses Gain on sale of equipment....05.100 s 2,60o 2,500 Interest expense Income before taxes Income tax expense Net i 239,700 71,910 $167,790 Gibson Industries, Inc. Balance Sheets As of December 31, 2012 and 2011 2012 2011 Assets Current assets: Cash and cash equivalents Accounts receivable Inv Prepaid insurance $ 477,000 288,000 129,000 213,000 5,500 $ 889,500 635,500 595,000 (149,000) (112,000) 73,000 $1,458,500 $1,191,500 77,000 326,000 9,500 Total current assets Property, plant, and equipment Less: Accumulated depreciation Investments Total assets 625,000 93,000 Liabilitics Current liabilities: Accounts payable (inventory purchases) Salaries payable Interest payable Taxes paya Other accrued operating expenses S 59,000 39,000 17,400 800 13,000 3,000 73,200 23,000 96,200 16,100 1,500 62,910 6,100 Total current liabilities 145,61070 Bonds payable Total liabilities 65,000 210,610 Stockholders' equity Common stock Retained e Total stockholders' equity Total liabilities and equity 601,000 494,300 90 1,095,300 $1,458,500 $1,191,500 601,000 646,890 1,247,8
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