The balance sheet of Terrier Company at the end of 2009 is presented here, along with certain

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The balance sheet of Terrier Company at the end of 2009 is presented here, along with certain other information for 2010:
December 31, 2009
Cash ................ $ 140,000
Accounts receivable .......... 155,000
Total current assets ........... $ 295,000
Land ................. $ 300,000
Plant and equipment .......... 500,000
Accumulated depreciation ....... (150,000)
Investments .............. 100,000
Total long-term assets .......... $ 750,000
Total assets .............. $1,045,000
Current liabilities .......... $ 205,000
Bonds payable ........... $ 300,000
Common stock ........... $ 400,000
Retained earnings .......... 140,000
Total stockholders’ equity ........ $ 540,000
Total liabilities and
stockholders’ equity ..........$1,045,000
Other information is as follows:
a. Net income for 2010 was $70,000.
b. Included in operating expenses was $20,000 in depreciation.
c. Cash dividends of $25,000 were declared and paid.
d. An additional $150,000 of bonds was issued for cash.
e. Common stock of $50,000 was purchased for cash and retired.
f. Cash purchases of plant and equipment during the year were $200,000.
g. An additional $100,000 of bonds was issued in exchange for land.
h. During the year, sales exceeded cash collections on account by $10,000. All sales are on account.
i. The amount of current liabilities remained unchanged during the year.
Required
1. Prepare a statement of cash flows for 2010 using the indirect method in the Operating Activities section. Include a supplemental schedule for noncash activities.
2. Prepare a balance sheet at December 31, 2010.
3. Provide a possible explanation as to why Terrier decided to issue additional bonds for cash during 2010.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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