Preparing the statement of cash flows—indirect method [35-45 min]
Accountants for Smithson, Inc., have assembled the following data for the year ended December 31, 2012:
December 31, | ||
2012 | 2011 | |
Current Accounts: | ||
Current assets: | ||
Cash and cash equivalents.......... | $ 106,100 | $ 26,000 |
Accounts receivable............... | 64,300 | 68,900 |
Inventories...................... | 80,000 | 75,000 |
Current liabilities: | ||
Accounts payable................. | 57,700 | 56,100 |
Income tax payable ............... | 14,500 | 17,000 |
Transaction Data for 2012: | ||||
Issuance of common stock | Payment of note payable ...... | $46,100 | ||
for cash............... | $ 45,000 | Payment of cash dividends ..... | 52,000 | |
Depreciation expense......... | 18,000 | Issuance of note payable | ||
Purchase of equipment........ | 70,000 | to borrow cash......... | 68,000 | |
Acquisition of land by issuing | Gain on sale of building....... | 3,500 | ||
long-term note payable . . . | 113,000 | Net income................. | 68,500 | |
Cost basis of building sold ..... | $50,000 | |||
Requirement
1. Prepare Smithson’s statement of cash flows using the indirect method. Include an accompanying schedule of noncash investing and financing activities.
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