1. Statement of Cash Flows  

Comparative Trial Balances are given below for Michaels Company

	12/31/2019	12/31/2018
Cash	38,000	27,000
Receivables	56,000	48,000
Inventory	120,000	127,000
Equipment	328,000	235,000
Accumulated Depreciation	(82,000)	(71,000)
Accounts Payable	(68,000)	(55,000)
Notes Payable	(50,000)	0
Bonds Payable	(75,000)	(100,000)
Common Stock	(150,000)	(100,000)
Retained Earnings	(117,000)	(111,000)

The Income statement for Michaels for the year ended December 31, 2019 is given below:

Sales	385,000
Gain on sale of equipment	2,000
Total Revenues	387,000
Cost of goods sold	197,000
Depreciation Expense	23,000
Other Operating Expenses	127,000
Total Expenses	347,000
Net Income	40,000

Other Information

• Equipment costing $25,000 with a book value of $13,000 was sold for $15,000
• Bonds were retired during the period and additional shares of common stock were sold.
• Equipment costing $118,000 was purchased during the year. $68,000 was paid in cash and a note payable was issued for the balance.
• Dividends of $34,000 were paid during the period.

Using this information and the T accounts, prepare a Statement of Cash Flows.  

Answer rating: 100% (QA)

To prepare the Statement of Cash Flows using the given information and T accounts we need to follow a series of steps Here is a stepbystep guide Step ... View the full answer