Q1) Presented below is information related to operations of Bryers Corporation.
| December |
| |
2006 |
2005 |
|
2006 |
| Cash |
$63,000 |
$40,000 |
Sales |
$420,000 |
| Accounts receivable |
58,000 |
48,000 |
Cost of goods sold |
190,000 |
| Inventory |
37,000 |
22,000 |
Gross profit |
230,000 |
| Prepaid expenses |
16,000 |
20,000 |
Depreciation expense |
14,000 |
| Land |
36,000 |
20,000 |
Other operating expenses |
141,000 |
| Building |
100,000 |
100,000 |
Income from operations |
75,000 |
| Accumulated depreciation- |
Loss on equipment sale |
|
|
2,000 |
| building |
-17,000 |
-8,000 |
Income before income taxes |
73,000 |
| Equipment |
58,000 |
80,000 |
Income tax expense |
23,000 |
| Accumulated depreciation- |
|
|
Net income |
$50,000 |
| equipment |
-15,000 |
-20,000 |
|
|
| |
Total |
$336,000 |
$302,000 |
|
| |
|
|
|
|
| Accounts payable |
$35,000 |
$39,000 |
|
|
| Bonds payable |
0 |
100,000 |
|
|
| Common stock |
200,000 |
100,000 |
|
|
| Retained earnings |
101,000 |
63,000 |
|
|
| |
Total |
$336,000 |
$302,000 |
|
Extra information:
In 2006,
(a) Bryers declared and paid a cash dividend of $12,000.
(b) Company converted $100,000 of bonds into common stock.
(c) Equipment with a cost of $22,000 and a book value of $12,000 was sold for $10,000. Land was acquired for cash.
(d) Prepaid expenses pertain to operating expenses; accounts payable pertains to merchan-dise purchases.
Instructions
Create statement of cash flows in proper form for 2006, by using indirect or direct method, your choice.