Use the following data for Jenkins Co. to prepare a statement of cash flows using the indirect method for the year ended June 30, 20x6.

Jenkins Co.
Income Statement
For the Year Ended June 30, 20x6
Sales					$700,000
Less expenses
	Cost of goods sold	$400,000
	Depreciation expense	40,000
	Administrative expenses	104,000
	Selling expenses	70,000
	Loss on sale of investment	1,000		615,000
Income before income taxes					$ 85,000
Income taxes expense					20,000
Net income			$ 65,000

Jenkins Co.
Comparative Balance Sheets
June 30, 20x6 and 20x5
Assets	20x6	20x5
Cash	$ 9,000	$ 30,000
Accounts receivable (net)	70,000	55,000
Inventory	80,000	100,000
Prepaid insurance	6,000	5,000
Long-term investments	40,000	50,000
Plant and equipment	160,000	80,000
Accumulated depreciation	(40,000)	(24,000)
Total assets	$325,000	$296,000
Liabilities
Accounts payable	$ 4,000	$ 12,000
Wages payable	440	520
Income taxes payable	1,560	1,480
Notes payable	40,000	24,000
Total liabilities	$ 46,000	$ 38,000
Stockholders' Equity
Common stock	$ 116,000	$ 130,000
Retained earnings	163,000	128,000
Total stockholders' equity	$279,000	$258,000
Total liabilities and stockholders' equity	$325,000	$296,000

Additional information:

A plant asset costing $40,000 was sold for its book value of $16,000.
A long-term investment was sold for $9,000.
The outstanding notes are long-term. A $16,000 note was issued during 20x6.

Answer rating: 100% (QA)

Answer Statement of Cash Flow Particulars Amount Total Amount Opening cash a... View the full answer