#47

P2. (10 points) Selected financial statement information and additional data for Minnie Hooper Co. is presented below. Using indirect method, prepare a statement of cash flows for the year ending December 31, Year 2.

December 31

Year 2 Year 1

Cash......................................................... $93,600 $33,400

Accounts receivable (net)........................ 63,200 37,000

Inventory................................................. 124,500 102,650

Investments.............................................. 79,500 107,000

Plant assets............................................... 348,000 205,000

Accumulated depreciation (44,000) (40,000)

TOTAL........................................ $634,800 $445,050

Accounts payable..................................... 56,600 48,280

Accrued expense payable........................ 15,100 18,830

Bonds payable......................................... 140,000 70,000

Common stock......................................... 280,000 200,000

Retained earnings.................................... 173,100 107,940

TOTAL........................................ $664,800 $445,050

Income Statement, December 31, Year 2

Sales Revenue.................................................... $297,500

Less:

Cost of goods sold......................................... $99,460

Operating expenses, excluding

depreciation expense................................. 19,670

Depreciation expense...................................... 25,000

Loss on disposal of plant assets...................... 5,000

Income tax expense........................................ 37,270

Interest expense.............................................. 2,940 189,340

Net income........................................................... $108,160

Additional data for Year 2:

1. New plant assets costing $149,000 were purchased for cash during the year.

2. Investments were sold at cost.

3. Plant assets costing $36,000 were sold for $10,000, resulting in a loss of $5,000.

4. A cash dividend of $43,000 was declared and paid during the year.

5. Common stock of $30,000 was issued to exchange a new plant asset.