The comparative balance sheet for Mott Company appears below:

MOTT COMPANY

Comparative Balance Sheet

Dec. $31,2008$ Dec. $31,2007$

Assets

Cash $..............................................................................................$ $$50,000$ $$12,000$

Accounts receivable $......................................................................6,0008,000$

Inventory........................................................................................ $11,0007,000$

Prepaid expenses.......................................................................... $2,0003,000$

Building.......................................................................................... $24,00020,000$

Accumulated depreciation$$building $.............................................(3,000)(2,000)$

Total assets $.............................................................................$ $$90,000$ $$48,000$

Liabilities and Stockholders' Equity

Accounts payable $..........................................................................$ $ $1,000$ $ $4,000$

Long$-$term note payable................................................................. $13,00014,000$

Common stock............................................................................... $33,00018,000$

Retained earnings $.........................................................................43,00012,000$

Total liabilities and stockholders' equity................................... $$90,000$ $$48,000$

The income statement for the year is as follows:

MOTT COMPANY

Income Statement

For the Year Ended December $31,2008$

Sales $($all on credit$)........................................................................$ $$280,000$

Expenses and losses

Cost of goods sold $...................................................................$ $$184,000$

Operating expenses, exclusive of depreciation $.......................42,300$

Depreciation expense $..............................................................3,000$

Interest expense $......................................................................1,200$

Loss on sale of land and building $............................................5,500$

Income taxes $...........................................................................9,000$

Total expenses and loss $....................................................245,000$

Net income $....................................................................................$ $ $35,000$

Land costing $$15,000$ was acquired with cash and subsequently sold for $$12,500$ cash. Buildings

costing $$12,000$ was purchased.

Instructions

$1.$ Prepare a statement of operating cash flows for the year ended December $31,2008$ under

the indirect method and the direct method

$2.$ Calculate the amount of money realized from the sale of the building

$3.$ What were the dividends paid in cash?

Financial Accounting Sample exam Fall $2019$ Sarath

Cash flows from operating activities

Net income $....................................................................................$

Adjustments to reconcile net income to net cash provided by

operating activities:

Depreciation expense $...........................................................$

Decrease in accounts receivable..........................................

Increase in inventory.............................................................

Decrease in prepaid expenses $.............................................$

Decrease in accounts payable..............................................

Loss on sale of land..............................................................

Net cash provided by operating activities $....................$

$2.$ Cash From Sale of Building $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

$3.$ Cash Dividends paid $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Income statement Line Adjustment Total Cash Flow Statement Line

Revenue Cash From Customers

COGS Cash to suppliers

Operating Expenses Cash Op$.$ Exp $($paid to

employees$)$

Depreciation Cash paid for Depreciation

Loss on Sale of Equipment Cash obtained from sale

Interest Expense Cash Interest $($ paid to Financiers$)$

Tax Expense Cash Taxes