Introduction to Financial Accounting

Exercise 13-9 a The comparative statement of financial position for Crane Retailers Ltd. follows: $ CRANE RETAILERS LTD. Statement of Financial Position December 31 Assets 2018 Cash 0 Accounts receivable 77,000 Inventory 215,000 Furniture 134,000 Accumulated depreciation (39,000) Total assets $387,000 2017 $ 15,000 50,000 170,000 165,000 (47,000) $353,000 Liabilities and Shareholders' Equity Bank overdraft $ 4,000 Accounts payable 64,000 Bank loan payable (noncurrent) 91,000 Common shares 53,000 Retained earnings 175,000 Total liabilities and shareholders' equity $387,000 $ 0 42,000 102,000 63,000 146,000 $353,000 Additional information: 1. Net income was $34,000 in 2018. 2. Depreciation expense was $19,000 in 2018. 3. In 2018, no new bank loans were received. 4. In 2018, no furniture was purchased, but some furniture was sold for $8,000, which resulted in a gain on this disposal of $4,000. 5. No common shares were issued during the year but some were reacquired at the cost at which they were originally issued. 6. In 2018, dividends were declared and paid. (a) Prepare a statement of cash flows using the indirect method for 2018. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) CRANE RETAILERS LTD. Statement of Cash Flows-Indirect Method Adjustments to reconcile net income to V V V V