Prepare statement of cash flows using the indirect method. The income statement for 2014 and the balance
Question:
Additional information follows:
a. Sold plant asset for $ 4,500. The original cost of this plant asset was $ 10,400 and it had $ 8,900 of accumulated depreciation associated with it.
b. Paid $ 5,000 on the bonds payable; issued $ 41,000 of new bonds payable.
c. Declared and paid cash dividends of $ 18,700.
d. Purchased new investment for $ 10,000.
e. Purchased new equipment for $ 30,400.
Requirement
Prepare a statement of cash flows for Hoover Industries, Inc., for the year ended December 31, 2014, using the indirectmethod.
Transcribed Image Text:
Hoover Industries, Inc. Income Statement For the Year Ended December 31, 2014 5 Sales reve nues 6 Less: Cost of goods sold 7 Gross profit 8 Less oporating expenses: 9 Salaries and wages expense 10Insurance expense 11 Depreciation expense 12ther operating expenses 13 Total operating expenses 14 Operating income 15 Plus other income and less other expenses: 16Interest expense 17Gain on sale of PP&E 18 19 Income before income taxes 20 Loss Income tax expense 21 Net income 957 000 85,000 572,000 ー 192,000 10,500 48,900 338,400 S 233 600 500 Total other income and expenses 500 5 231,100 69.330 161.7 Hoover Industries, Inc. Comparative Balance Sheets December 31, 2014 and 2013 5 Current assets: 6 Cash 7 Accounts receivable 8 Iventory 9 Prepaid irsurance 10Total current assets 285,000 122,000 213,000 7,000 $ 887000627000 473,000 S 72,000 333,000 12 Property, plant, and equipment 13 Less: Accumulated depreciation 14 Investments 15 Total assets 16 17 18 Current labilitess 19 Accounts pay able (inventory purchases) 20 Wages payable 21 Interest payable 22 Income taxes payable 23 Other accrued expenses pay able 24Total current liabilities 25 595,000 5 575,000 86000 Liabilities 54,000 S 16.200 1,600 0,330 37000 300 9,500 67,300 94,300 600,000 600,000 138,230 26 Long-term liabilities 27 Total liabilities 28 29 30 Common stock 63,000 201,230 5 Stockholders' equity 31 Retained earnings 32 Total stockholders' equity 614770 34 Total liabilities and equity 35 1416000 151166 000
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