Question:
Prius Company, a merchandiser, recently completed its 2011 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The companys balance sheets and income statement follow.
Additional Information on Year 2011 Transactions
a. Purchased equipment for $74,000 cash.
b. Issued 10,000 shares of common stock for $5 cash per share.
c. Declared and paid $85,000 of cash dividends.
Required
Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method.
Transcribed Image Text:
PRIUS COMPANY Comparative Balance Sheets December 31, 2011 and 2010 20112010 Assets Cash. . . Accounts receivable Merchandise inventory Equipment Accum. deprecation Equipment(157000) 102,000) $ 164,000 131,000 70,000 515,000 276,000 PRIUS COMPANY Income Statement For Year Ended December 31, 2011 82,000 605,000 350,000 $1,792,000 Total assetsS1,044,000890,000 Cost of goods sold Gross profit Operating expenses 087,000 Liabilities 705,000 Accounts payable and Equity Income taxes payable Common stock, $2 par value 173,000 119,000 17,000 560,000 20,000 580,000 Depreciation expense . .55,000 494.000 Other expenses Income before taxes Income taxes expense Net income 549,000 Paid-in capital in excess 156,000 of par, common stock 24,000 Retained earnings 163,000 31,000 044.000 890,000 193,000 78,000 $ 132,000 Total liabilities and equity $1