The comparative balance sheets and income statements for Rundle Company follow: Balance Sheets As of December...

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The comparative balance sheets and income statements for Rundle Company follow: Balance Sheets As of December 31 Year 2 Year 1 Assets Cash Accounts receivable $23,360 1,743 $2,974 1,046 Inventory 6,572 6,161 Equipment 16,578 41,088 Accumulated depreciation-equipment (7,490) (18,129) Land 19,283 9,263 Total assets $60,046 $42,403 Liabilities and equity Accounts payable (inventory) $2,648 $4,278 Long-term debt 2,759 6,307 Common stock 23,300 8,500 Retained earnings 31,339 Total liabilities and equity $60,046 23,318 $42,403 Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income Additional Data $30,830 (12,220) 18,610 (3,187) 15,423 700 (80) $16,043 1. During Year 2, the company sold equipment for $18,374; it had originally cost $31,500. Accumulated depreciation on this equipment was $13,826 at the time of the sale. Also, the company purchased equipment for $6,990 cash. 2. The company sold land that had cost $4,780. This land was sold for $4,700, resulting in the recognition of a $80 loss. Also, common stock was issued in exchange for title to land that was valued at $14,800 at the time of exchange. 3. Paid dividends of $8,022. Required Prepare a statement of cash flows using the indirect method. Note: Amounts to be deducted and cash outflows should be indicated by a minus sign. RUNDLE COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Less: Increase/Decrease in current assets and current liabilities: The comparative balance sheets and income statements for Rundle Company follow: Balance Sheets As of December 31 Year 2 Year 1 Assets Cash Accounts receivable $23,360 1,743 $2,974 1,046 Inventory 6,572 6,161 Equipment 16,578 41,088 Accumulated depreciation-equipment (7,490) (18,129) Land 19,283 9,263 Total assets $60,046 $42,403 Liabilities and equity Accounts payable (inventory) $2,648 $4,278 Long-term debt 2,759 6,307 Common stock 23,300 8,500 Retained earnings 31,339 Total liabilities and equity $60,046 23,318 $42,403 Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income Additional Data $30,830 (12,220) 18,610 (3,187) 15,423 700 (80) $16,043 1. During Year 2, the company sold equipment for $18,374; it had originally cost $31,500. Accumulated depreciation on this equipment was $13,826 at the time of the sale. Also, the company purchased equipment for $6,990 cash. 2. The company sold land that had cost $4,780. This land was sold for $4,700, resulting in the recognition of a $80 loss. Also, common stock was issued in exchange for title to land that was valued at $14,800 at the time of exchange. 3. Paid dividends of $8,022. Required Prepare a statement of cash flows using the indirect method. Note: Amounts to be deducted and cash outflows should be indicated by a minus sign. RUNDLE COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Less: Increase/Decrease in current assets and current liabilities:

Answer rating: 100% (QA)

1 Net Income Start with the net income from the income statement which is 16043 2 Adjustments for NonCash Items Add back Depreciation Expense Deprecia... View the full answer