Preparing the statement of cash flows—indirect method [35-45 min]
Accountants for Johnson, 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..... | $ 92,100 | $ 17,000 |
Accounts receivable.......... | 64,500 | 69,200 |
Inventories................. | 87,000 | 80,000 |
Current liabilities: | ||
Accounts payable............ | 57,900 | 56,200 |
Income tax payable .......... | 14,400 | 17,100 |
Transaction Data for 2012: | |||
Issuance of common stock | Payment of note payable ...... | $48,100 | |
for cash............... | $ 40,000 | Payment of cash dividends ..... | 54,000 |
Depreciation expense......... | 25,000 | Issuance of note payable | |
Purchase of equipment........ | 75,000 | to borrow cash ......... | 67,000 |
Acquisition of land by issuing | Gain on sale of building ....... | 5,500 | |
long-term note payable . . . | 122,000 | Net income ................. | 70,500 |
Cost basis of building sold ..... | 53,000 | ||
Requirement
1. Prepare Johnson’s statement of cash flows using the indirect method. Include an accompanying schedule of noncash investing and financing activities.
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