The financial records of Cooper Works showed the following information related to B/S accounts and I/S.

Balance Sheet at End of Year

2019 2020

Debits

Cash $ 2,000 $ 2,200

A/R 3,800 4,800

Inventory 10,400 10,000

Prepaid expenses 600 800

LT – investments 2,000 0

Buildings 18,000 24,000

Machinery 8,000 12,400

Patents 1,000 800

$45,800 $55,000

Credits

A/P $ 2,400 $ 1,600

ST - N/P (operating) 1,800 2,600

Accrued wages 600 400

Acc. Depreciation 8,000 7,800

LT – N/P 6,000 7,000

C/S 24,000 30,000

R/E 3,000 5,600

$45,800 $55,000

Income Statement for the Year

Revenues and gains $24,400

CGS (8,400)

Salaries expense (6,000)

Interest expense (1,600)

Other expenses and losses (3,200)

NI $ 5,200

Additional data for 2020:

1. Acquired machinery costing $3,000; paid 1/3 in cash and issued a 5-year, interest-bearing note for the balance.
2. Acquired machinery costing $5,000 by issuing C/S.
3. Made addition to the building costing $6,000, paid cash.
4. Paid a $1,000 LT note by issuing C/S.
5. Sold investment for $2,400 cash.
6. Paid cash dividends.
7. Depreciation recorded on buildings and machinery, $1,600.
8. Disposed of for $1,400 old machinery that originally cost $3,600 and that was ½ depreciated.
9. Proceeds from the ST-N/P were used to purchase inventory.

Required:

1. Prepare a statement of cash flows using the INDIRECT method. 
2. Prepare CFO using the DIRECT method. 

Answer rating: 100% (QA)

Explanation a less Add Statement of cash flow by using indirect method ... View the full answer