Cash........ Accounts receivable (net) Inventories Prepaid expenses Investments (long-term) Land.... Buildings.. Accumulated depreciation-buildings Machinery and equipment....
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Cash........ Accounts receivable (net) Inventories Prepaid expenses Investments (long-term) Land.... Buildings.. Accumulated depreciation-buildings Machinery and equipment. Comparative Balance Sheet December 31, 2008 and 2007 Accumulated depreciation-machinery and equipment...... Patents.... Total assets Accounts payable (merchandise creditors). Accrued expenses (operating expenses) Income taxes payable.. Dividends payable...... Mortgage note payable, due 2019. Bonds payable......... Common stock, $30 par Liabilities and Stockholders' Equity Excess of issue price over par-common stock Retained earnings....... Total liabilities and stockholders' equity Sales........ Cost of merchandise sold Gross profit.. Operating expenses: Assets Depreciation expense Patent amortization Other operating expenses. Total operating expenses Income from operations.. Other income: Other expense: Gain on sale of investments. The income statement for Dowling Company is shown here: 2008 Interest expense. Income before income tax. Income tax expense. Net income....... $ 140,350 95,300 165,200 6,240 35,700 Dowling Company Income Statement For the Year Ended December 31, 2008 75,000 375,000 (71,300) 428,300 (148,500) 58,000 $1,159,290 $ 43,500 14,000 7,900 14,000 40,000 150,000 450,000 66,250 373,640 $1,159,290 $ 23,500 7,000 196,000 $ 11,000 26,000 2007 $ 95,900 102,300 157,900 5,860 84,700 90,000 260,000 (58,300) 428,300 (138,000) 65,000 $1,093,660 $ 46,700 12,500 8,400 10,000 0 250,000 375,000 41,250 349,810 $1,093,660 $1,100,000 710,000 $ 390,000 226,500 $ 163,500 (15,000) $ 148,500 50,000 $ 98,500 An examination of the accounting records revealed the following additional infor- mation applicable to 2008: a. Land costing $15,000 was sold for $15,000. b. A mortgage note was issued for $40,000. c. A building costing $115,000 was constructed. d. 2,500 shares of common stock were issued at 40 in exchange for the bonds payable. e. Cash dividends declared were $74,670. Instructions 1. Prepare a statement of cash flows, using the indirect method of reporting cash flows from operating activities. 2. Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities. Cash........ Accounts receivable (net) Inventories Prepaid expenses Investments (long-term) Land.... Buildings.. Accumulated depreciation-buildings Machinery and equipment. Comparative Balance Sheet December 31, 2008 and 2007 Accumulated depreciation-machinery and equipment...... Patents.... Total assets Accounts payable (merchandise creditors). Accrued expenses (operating expenses) Income taxes payable.. Dividends payable...... Mortgage note payable, due 2019. Bonds payable......... Common stock, $30 par Liabilities and Stockholders' Equity Excess of issue price over par-common stock Retained earnings....... Total liabilities and stockholders' equity Sales........ Cost of merchandise sold Gross profit.. Operating expenses: Assets Depreciation expense Patent amortization Other operating expenses. Total operating expenses Income from operations.. Other income: Other expense: Gain on sale of investments. The income statement for Dowling Company is shown here: 2008 Interest expense. Income before income tax. Income tax expense. Net income....... $ 140,350 95,300 165,200 6,240 35,700 Dowling Company Income Statement For the Year Ended December 31, 2008 75,000 375,000 (71,300) 428,300 (148,500) 58,000 $1,159,290 $ 43,500 14,000 7,900 14,000 40,000 150,000 450,000 66,250 373,640 $1,159,290 $ 23,500 7,000 196,000 $ 11,000 26,000 2007 $ 95,900 102,300 157,900 5,860 84,700 90,000 260,000 (58,300) 428,300 (138,000) 65,000 $1,093,660 $ 46,700 12,500 8,400 10,000 0 250,000 375,000 41,250 349,810 $1,093,660 $1,100,000 710,000 $ 390,000 226,500 $ 163,500 (15,000) $ 148,500 50,000 $ 98,500 An examination of the accounting records revealed the following additional infor- mation applicable to 2008: a. Land costing $15,000 was sold for $15,000. b. A mortgage note was issued for $40,000. c. A building costing $115,000 was constructed. d. 2,500 shares of common stock were issued at 40 in exchange for the bonds payable. e. Cash dividends declared were $74,670. Instructions 1. Prepare a statement of cash flows, using the indirect method of reporting cash flows from operating activities. 2. Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.
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Cash flows from Operating activities for Dowling Company is given below InDirect Method Dowling Comp... View the full answer
Related Book For
Financial Accounting An Integrated Statements Approach
ISBN: 978-0324312119
2nd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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