The following financial statements were drawn from the records of Culinary Products Co.: Income Statement For the
Question:
The following financial statements were drawn from the records of Culinary Products Co.:
Income Statement For the Year Ended December 31, Year 2
Sales revenue ..........................................................$35,700
Cost of goods sold ...................................................(14,150)
Gross margin ............................................................21,550
Depreciation expense ...............................................(3,600)
Operating income .......................................................17,950
Gain on sale of equipment ..........................................500
Loss on disposal of land ..............................................(50)
Net income ...................................................................$18,400
Additional Data
1. During Year 2, the company sold equipment for $18,500; it had originally cost $30,000. Accumulated depreciation on this equipment was $12,000 at the time of the sale. Also, the company purchased equipment for $7,000 cash.
2. The company sold land that had cost $4,000. This land was sold for $3,950, resulting in the recognition of a $50 loss. Also, common stock was issued in exchange for title to land that was valued at $12,000 at the time of exchange.
3. Paid dividends of $9,200.
Required
Prepare a statement of cash flows using the indirect method.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds