PR 16-2A Statement of Cash Flows Obj. 2, 3, 4, 5 The comparative balance sheet of Orange Angel Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Cash....... Accounts receivable (net).. Merchandise inventory..... Prepaid expenses.. Equipment.... Assets Accumulated depreciation-equipment... Total assets.. 13 Dec. 31, 20Y8 Dec. 31, 20Y7 + $ 151,000 $22,000 968.000 $ 190,000 569,000 759,000 28,000 19,000 1,424,000 (304,000) 2,032,000 (380,000) $3,321,000 $2,657,000 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors)..... $ 190,000 $ 171,000 Mortgage note payable....... 0 759,000 Common stock, $10 par.... 1,140,000 380,000 Paid-in capital in excess of par.. 570,000 190,000 Retained earnings............. 1,421,000 1,157,000 Total liabilities and stockholders' equity..... $3,321,000 $2,657,000 a. Net income, $359,000. b. Depreciation reported on the income statement, $218,000. c. Equipment was purchased at a cost of $750,000, and fully depreciated equipment costing $142,000 was discarded, with no salvage realized. d. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty. e. 76,000 shares of common stock were issued at $15 for cash. f. Cash dividends declared and paid, $95,000. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Answer Check figure: Net cash flows from operating activities, $425,000 Previous Next