Question:
Prepare the statement of cash flows using the indirect method. The income statement for 2012 and the balance sheets for 2012 and 2011 are presented for Henderson Industries.
Additional information follows:
a. Sold plant asset for $3,900. Original cost of this plant asset was $10,300 and it had $9,900 of accumulated depreciation associated with it.
b. Paid $4,500 on the bonds payable; issued $44,500 of new bonds payable.
c. Declared and paid cash dividends of $33,300.
d. Purchased new investment for $14,000.
e. Purchased new equipment for $15,300.
Requirement
Prepare a statement of cash flows for Henderson Industries, Inc., for the year ended December 31, 2012, using the indirect method.
Transcribed Image Text:
Henderson Industries, Inc. Income Statement For Year Ended December 31, 2012 Sales revenue Cost of goods s Gross Operating expenses: $952,000 386,000 S566,000 $189,000 Salary and wage expense Insurance expense 11,000 46,900 82,000 328,900 Other operating expense Operating i Other income and expense: S237,100 Gain on sale of equipment Interest expense S 3,500 5,100 1,600 S235,500 70,650 S164,850 Income before taxes Income tax expense Net i Henderson Industries, Inc. Comparative Balance Sheet As of December 31, 2012 and 2011 2012 2011 Assets Current assets: Cash and cash equivalents Accounts receivable $ 478,000 292,000 121,000 214,000 5,500 S 896,000S 632,500 595,000 150,000) (113,000) 76,000 $1,436,000 $1,190,500 77,000 335,000 6,000 Prepaid expenses Total current assets Property, plant, and equipment Less: Accumulated depreciation 600,000 90,00060 Total Liabilities Current liabilities: Accounts payable (inventory purchases) Salaries payable Interest payable Taxes payable Other accrued operating expenses $ 60,000 40,000 17,300 800 10,000 16,000 1,700 61,650 6,200 $ 145,550 71,600 26,000 Total current liabilities Bonds payable Total liabilities 66,000 211,5s0 97,600 Stockholders' equity Common stock Retained e Total stockholders' equity Total liabilities and stockholders' equity 609,000 609,000 615,450 463 $1,224,450 $1,092,900 $1,436,000 $1,190,500