The comparative balance sheets and income statements for Gypsy Company follow. Income Statement For the Year Ended
Question:
The comparative balance sheets and income statements for Gypsy Company follow.
Income Statement
For the Year Ended December 31, Year 2
Sales revenue ..........................................................$61,200
Cost of goods sold ..................................................(24,500)
Gross margin ..........................................................36,700
Depreciation expense ............................................(12,000)
Operating income ..................................................24,700
Gain on sale of equipment ...................................1,500
Loss on disposal of land .......................................(100)
Net income ............................................................$26,100
Additional Data
1. During Year 2, the company sold equipment for $21,500; it had originally cost $36,000. Accumulated depreciation on this equipment was $16,000 at the time of the sale. Also, the company purchased equipment for $29,000 cash.
2. The company sold land that had cost $6,000. This land was sold for $5,900, resulting in the recognition of a $100 loss. Also, common stock was issued in exchange for title to land that was valued at $22,000 at the time of exchange.
3. Paid dividends of $12,400.
Required
Prepare a statement of cash flows using the indirect method.
Step by Step Answer:
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds