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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.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M922480

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