The comparative balance sheet for Chelsea Company appears below: Chelsea Company Comparative Balance Sheet Dec. 31, 2010
Question:
The comparative balance sheet for Chelsea Company appears below:
Chelsea Company
Comparative Balance Sheet
Dec. 31, 2010 Dec. 31, 2009
Assets
Cash ............................................................................................ $51,000 $17,000
Accounts receivable ...................................................................... 6,000 8,000
Inventory ........................................................................................ 10,000 7,000
Prepaid expenses .......................................................................... 2,000 3,000
Building .......................................................................................... 30,000 15,000
Accumulated depreciation%u2014building ............................................. (3,000) (2,000)
Total assets .............................................................................. $96,000 $48,000
Liabilities and Stockholders' Equity
Accounts payable .......................................................................... $ 3,000 $ 5,000
Long-term note payable ................................................................. 12,000 13,000
Common stock .............................................................................. 38,000 18,000
Retained earnings .......................................................................... 43,000 12,000
Total liabilities and stockholders' equity ................................... $96,000 $48,000
The income statement for the year is as follows:
Chelsea Company
Income Statement
For the Year Ended December 31, 2010
Sales (all on credit) ........................................................................ $410,000
Expenses and losses
Cost of goods sold ................................................................... $252,000
Operating expenses, exclusive of depreciation....................... 94,300
Depreciation expense .............................................................. 1,000
Interest expense ...................................................................... 1,200
Loss on sale of land ................................................................. 2,500
Income taxes ........................................................................... 9,000
Total expenses and loss .................................................... 360,000
Net income .................................................................................... $ 50,000
Cash dividends of $19,000 were paid during the year. Land costing $20,000 was acquired by the issuance of common stock. The property was subsequently sold for $17,500 cash.
Instructions:
Prepare a statement of cash flows for the year ended December 31, 2010 using the indirect method.
Expert Answer:
Solution Chelsea Company Statement of cash flow For the year end December 31 201... View the full answer
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
