CHAPTER 15

LEARNING CASE

Condensed financial data of Dutton, Inc. follows:

DUTTON, INC.

Comparative Ending Balance Sheets

December 31, 2021

Assets 2021 2020

Cash $49,000 $79,000

Accounts Receivable 645,000 580,000

Inventory 660,000 615,000

Property, Plant, Equipment 1,515,000 1,466,000

Accumulated Depreciation (765,000) (641,000)

Total $2,104,000 $2,099,000

Liabilities and Owners Equity

Accounts Payable $250,000 $155,000

Accrued Liabilities 190,000 165,000

Income Taxes Payable 76,000 70,000

Bonds Payable 450,000 620,000

Common Stock 161,000 161,000

Retained Earnings 977,000 928,000

Total $2,104,000 $2,099,000

DUTTON, INC.

Income Statement Data

For the Year Ended December 31, 2021

Sales $3,600,000

Less: Cost of Goods Sold $2,550,000

Selling/Administrative Expenses 875,000

Income Taxes 63,000

Add: Gain on Sale of PPE 3,000

Net Income $115,000

Additional Information:

The company sold equipment that had an original cost of $13,000 and accumulated depreciation of $8,000. The cash proceeds from the sale were $8,000. The gain on sale was $3,000.

No new bonds were issued during the year.

Cash dividends were paid during the year.

There were no stock transactions during the year.

Instructions

Prepare a Statement of Cash Flows (Operating, Investing, and Financing sections) using the INDIRECT METHOD for operating activities.