Question Three:

A. Selected financial statement information and additional data for Portsmouth Co. is presented below. Prepare a statement of cash flows for the year ending December 31, 2018, by using the format provided below.

December 31

2018 2017

Cash $30,000 $35,000

Accounts receivable 55,000 45,000

Inventory 65,000 45,000

Prepaid expenses 15,000 25,000

Land 70,000 40,000

Equipment 90,000 75,000

Accumulated depreciation-Equipment (18,000) (8,000)

$307,000 $257,000

Share capital-ordinary-ordinary, $10 par $189,000 $159,000

Retained earnings 8,000 5,000

Accounts payable 65,000 52,000

Accrued liabilities 15,000 18,000

Bonds payable 30,000 0,000

Notes payable, long-term 0,000 23,000

$307,000 $257,000

Additional information:

1. Cash dividends of $9,000 were declared and paid during the year.
2. Land was acquired for $30,000 in exchange for ordinary shares, par $30,000, during the year; all equipment purchased was for cash.