To prepare the statement of cash flows, accountants for Spencer Electric Company have summarized 2010 activity in
Question:
Spencers 2010 income statement and balance sheet data follow:
Spencer Electric Company
Selected Balance Sheet Data
December 31, 2010
Increase
(Decrease)
Current assets:
Cash and cash equivalents................ $(29,700)
Accounts receivable.......................... (14,400)
Inventories........................................ (12,900)
Prepaid expenses............................... (6,000)
Long-term investments...................... (36,700)
Equipment, net................................... 15,300
Land................................................... 61,700
Current liabilities:
Accounts payable.............................. (7,800)
Interest payable................................ (2,200)
Salary payable.................................. 7,200
Other accrued liabilities.................... (10,400)
Income tax payable........................... (2,500)
Long-term note payable...................... (58,300)
Common stock.................................... 100,900
Retained earnings................................ (23,300)
Treasury stock..................................... (26,300)
Requirements
1. Prepare the statement of cash flows of Spencer Electric Company for the year ended December 31, 2010, using the direct method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities.
2. Use Spencers 2010 income statement and balance sheet to prepare a supplementary schedule of cash flows from operating activities by using the indirectmethod.
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...
Step by Step Answer:
Financial accounting
ISBN: 978-0136108863
8th Edition
Authors: Walter T. Harrison, Charles T. Horngren, William Bill Thomas