Question

Problem 12-07A Presented below are the financial statements of Marigold Company. Marigold Company Comparative Balance Sheets December 31 Assets 2022 Cash $ 38,500 Accounts receivable 22,000 Inventory 30,800 Property, plant, and equipment 66,000 Accumulated depreciation (35,200) $122,100 2021 $ 22,000 15,400 22,000 85,800 (26,400) $118,800 Total Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total $ 20,900 7,700 18,700 19,800 55,000 $122,100 $ 16,500 8,800 36,300 15,400 41,800 $118,800 $266,200 192,500 73,700 Marigold Company Income Statement For the Year Ended December 31, 2022 Sales revenue Cost of goods sold Gross profit Selling expenses $19,800 Administrative expenses 6,600 Income from operations Interest expense Income before income taxes Income tax expense 26,400 47,300 3,300 44,000 8,800 $ 35,200 Net income Additional data: 1. Depreciation expense was $19,250. 2. Dividends declared and paid were $22,000. 3. During the year equipment was sold for $9,350 cash. This equipment cost $19,800 originally and had accumulated depreciation of $10,450 at the time of sale. Detenth Flachen

Answer 1

	Statement of Cash Flows - Indirect Method
		Amount in $	Amount in $
	Net income		$             35,200
	Cash flows from operating activities
	Adjustments for:
	Depreciation	$             19,250
	(Increase) / Decrease in Account receivables	$              -6,600
	Inventory Decrease / (Increase)	$              -8,800
	Accounts payable Increase / ( Decrese)	$                4,400
	Decrease in income tax payable	$              -1,100
			$                7,150
	Net cash from operating activities		$             42,350
	Cash flows from investing activities
	Sale of Equipment	$                9,350
	Net cash used in investing activities		$                9,350
	Cash flows from Financing activities
	Issue of Common Stock	$                4,400
	Retirement of Bonds	$            -17,600
	Dividend Paid	$            -22,000
	Net cash used in financing activities		$            -35,200
	Net increase in cash and cash equivalents		$             16,500
	Add :Cash and cash equivalents at beginning of period		$             22,000
	Cash and cash equivalents at end of period		$             38,500