Based on an analysis of the cash and other accounts, the following information was provided by the


Based on an analysis of the cash and other accounts, the following information was provided by the controller of Black Iron, Inc., a manufacturer of wood-burning stoves, for the year 2013.

(a) Cash sales for the year were $210,000; sales on account totaled $240,000.

(b) Cost of goods sold was 50% of total sales.

(c) All inventory is purchased on account.

(d) Depreciation on equipment was $86,000 for the year.

(e) Amortization of patent was $9,000.

(f) Collection of accounts receivable was $98,000.

(g) Payments on accounts payable for inventory equaled $123,000.

(h) Rent expense paid in cash was $40,700.

(i) Cash of $580,000 was obtained by issuing 40,000 shares of $10 par stock.

(j) Land worth $425,000 was acquired in exchange for a $400,000 bond.

(k) Equipment was purchased for cash at a cost of $287,000.

(l) Dividends of $115,000 were declared.

(m) Dividends of $52,000 that had been declared the previous year were paid.

(n) A machine used on the assembly line was sold for $26,000. The machine had a book value of $19,000.

(o) Another machine with a book value of $2,300 was scrapped and was reported as an ordinary loss. No cash was received on this transaction.

(p) The cash account had a balance of $79,000 on January 1, 2013.


Use the direct method to prepare a statement of cash flows for Black Iron, Inc., for the year ended December 31, 2013?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Intermediate Accounting

ISBN: 978-0538479738

18th edition

Authors: Earl K. Stice, James D. Stice

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