Question

Condensed financial data of P Company appear below: P COMPANY Comparative Statements of Financial Position December 31 2017 2016 $315,000 $250,000 (65,000 (60,000) 75,000 25,000 132,000 53,000 71,00035,000 $635,000 $510,000 Plant assets Investments Prepaid expenses Inventories Accounts receivable Cash 90,000 19,000 120,000 85,000 Total Share capital-ordinary Retained earnings Bonds payable Accounts payable Accrued expenses payable $245,000 $170,000 81,000 160,000 75,000 138,000 130,000 Total $635,000 $510,000 P COMPANY Income Statement For the Year Ended December 31, 2017 Sales revenue Less: $470,000 Cost of goods sold Operating expenses (excluding depreciation) Interest expense Depreciation expense Income taxes Loss on sale of plant assets S280,000 60,000 18,000 17,000 15,000 393.000 Net income Additional information: 1. New plant assets costing $90,000 were purchased for cash in 2017 2. Old plant assets costing $25,000 were sold for $10,000 cash when book value was $13,000 3. Bonds with a face value of $30,000 were converted into $30,000 of ordinary shares. 4. A cash dividend of $20,000 was declared and paid during the year 5. Accounts payable pertain to merchandise purchases. Instructions Prepare a statement of cash flows for the year using the indirect method

Answer 1

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