Presented below are data taken from the records of Morgenstern Company. Additional information: 1. Held-to-maturity securities carried
Question:
Presented below are data taken from the records of Morgenstern Company. Additional information:
1. Held-to-maturity securities carried at a cost of $43,000 on December 31, 2009, were sold in 2010 for $34,000. The loss (not extraordinary) was incorrectly charged directly to Retained Earnings.
2. Plant assets that cost $60,000 and were 80% depreciated were sold during 2010 for $8,000. The loss (not extraordinary) was incorrectly charged directly to Retained Earnings.
3. Net income as reported on the income statement for the year was $59,000.
4. Dividends paid amounted to $10,000.
5. Depreciation charged for the year was $28,000. Prepare a statement of cash flows for the year 2010 using the indirectmethod.
DepreciationDepreciation is an important concept in accounting. By definition, depreciation is the wear and tear in the value of a noncurrent asset over its useful life. In simple words, depreciation is the cost of operating a noncurrent asset producing...
Step by Step Answer:
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield